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24–843 PDF 2005

S. HRG. 109–203

THE COMMISSION FOR AFRICA: RECOMMENDATIONS FOR A COHERENT

STRATEGY FOR AFRICA

HEARING

BEFORE THE

COMMITTEE ON FOREIGN RELATIONS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MAY 17, 2005

Printed for the use of the Committee on Foreign Relations

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

COMMITTEE ON FOREIGN RELATIONS

RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska

LINCOLN CHAFEE, Rhode Island

GEORGE ALLEN, Virginia

NORM COLEMAN, Minnesota

GEORGE V. VOINOVICH, Ohio

LAMAR ALEXANDER, Tennessee

JOHN E. SUNUNU, New Hampshire

LISA MURKOWSKI, Alaska

MEL MARTINEZ, Florida

JOSEPH R. BIDEN, JR., Delaware

PAUL S. SARBANES, Maryland

CHRISTOPHER J. DODD, Connecticut

JOHN F. KERRY, Massachusetts

RUSSELL D. FEINGOLD, Wisconsin

BARBARA BOXER, California

BILL NELSON, Florida

BARACK OBAMA, Illinois

KENNETH A. MYERS, Jr., Staff Director

ANTONY J. BLINKEN, Democratic Staff Director

(II)

CONTENTS

Page

Baker, Hon. Nancy Kassebaum, Commissioner, Commission for Africa, and

former U.S. Senator, Washington, DC ............................................................... 5

Prepared statement .......................................................................................... 9

Birdsall, Nancy, President, Center for Global Development, Washington, DC .. 16

Prepared statement .......................................................................................... 20

Feingold, Hon. Russell D., U.S. Senator from Wisconsin ..................................... 3

Lugar, Hon. Richard G., U.S. Senator from Indiana ............................................ 1

Martinez, Hon. Mel, U.S. Senator from Florida .................................................... 4

Thiam, Tidjane, Commissioner, Commission for Africa, and Director, Group

Strategy and Development, Aviva, London ........................................................ 11

Prepared statement .......................................................................................... 14

(III)

(1)

THE COMMISSION FOR AFRICA: RECOMMENDATIONS FOR A COHERENT STRATEGY FOR

AFRICA

TUESDAY, MAY 17, 2005

U.S. SENATE,

FOREIGN RELATIONS COMMITTEE,

Washington, DC.

The committee met, pursuant to notice, at 9:30 a.m., in room

SD–419, Dirksen Senate Office Building, Hon. Richard G. Lugar,

chairman of the committee, presiding.

Present: Senators Lugar, Martinez, Feingold, and Obama.

OPENING STATEMENT OF HON. RICHARD G. LUGAR, U.S.

SENATOR FROM INDIANA

The CHAIRMAN. This meeting is called to order.

The Committee on Foreign Relations meets today to review the

report of the Commission for Africa issued on March 11, in preparation for the July G–8 Summit at Gleneagles, Scotland. The Commission for Africa was established by Prime Minister Tony Blair to

review international policy toward Africa. Prime Minister Blair has

stated his intention to make Africa policy a priority of the G–8 during the United Kingdom’s Presidency in 2005.

The G–8 already has taken steps to examine international policies related to Africa. The Africa Action Plan was introduced at the

Kananaskis summit in 2002 and adopted at the Evian summit in

2003. President Bush hosted the G–8 Summit at Sea Island, Georgia, in 2004, where the plan was augmented by the Global Peace

Operations Initiative to train peacekeepers. For 2005, Prime Minister Blair has chosen to elevate Africa issues to the top of the

agenda at the Gleneagles summit. The report of the Commission

for Africa echoes the Prime Minister’s contention that now is the

time for the international community to respond to the challenges

of Africa with a concerted and coherent program.

Today, we intend to consider the varied recommendations of the

Commission. The report is an ambitious blueprint for harnessing

the efforts of the G–8 and other nations on behalf of African development and reform. It recognizes that African governments must

be partners for change within their own countries and within regional organizations. It is significant that of the 17 members of the

Commission, 9 come from Africa. There has been considerable effort to include in the report the input of African civil society, as

well as the private sector.

2

I met last week with Nobel Laureate Ms. Wangari Maathai of

Kenya, whose tree planting campaign has contributed greatly to

the reforestation of Kenya. Her individual initiative not only has

been an environmental triumph, it has provided resources for the

basic needs of women and children, because trees are essential to

shelter, fuel, and water conservation. She and other individuals can

have profound impact on Africa’s future, but must be enabled

through good governance that facilitates citizen participation.

I have been encouraged, recently, by the growing interest in Africa in the United States. Our Nation sees more clearly in the postSeptember 11 world how our own well-being is connected to

progress on the African Continent. Americans are coming to understand that a stable and prosperous Africa can better cooperate on

a range of shared concerns, from weapons proliferation and terrorism, to environmental challenges and contagious diseases.

These changing attitudes have bolstered the work of those in

Congress who regard Africa as a priority for action. During the last

several years we have been able to put in place the building blocks

for a sustained American engagement in Africa that can complement international efforts.

Last June, Congress passed a bill that I had introduced to extend

the Africa Growth and Opportunity Act. Thanks to AGOA, which

has exempted 1,800 African products from United States tariffs,

the African textile industry now employs tens of thousands of

workers. Moreover, nonoil trade between the United States and Africa is expanding significantly.

In 2003, Congress passed legislation creating the President’s Millennium Challenge Corporation. This bold new approach to aid will

funnel extra assistance to developing countries that are making improvements in economic reform, promotion of the rule of law, and

anticorruption measures.

Eight African countries are among the first 17 candidates declared eligible for MCC funding, which builds on a key lesson of

AGOA—namely, that private investment will flow to countries that

create a stable, predictable investment climate.

In 2003, Congress also pledged $15 billion over 5 years for the

most serious crisis facing Africa, the HIV/AIDS pandemic. In support of this initiative, I have introduced additional legislation to address Africa’s AIDS-orphan crisis, and a resolution backing global

cooperation on an HIV vaccine.

More work needs to be done to provide incentives for private investment in Africa, to ensure that the revenues from Africa’s oil

boom will go to all of its citizens, and to relieve Africa’s international debt burden. We also need to promote agricultural development. Wealthy countries must modify their own farm subsidies,

so that Africans can both feed themselves and compete in a fair

world market for exports.

The legislation Congress has enacted, and the proposals underway, have the potential to form the type of sustainable, comprehensive program that we have previously lacked. But enactment of a

legislative framework for Africa is not an end in itself. Initiatives

must be carefully managed to ensure that they work well and enjoy

strong support. They also must be coordinated with broader international efforts like the forthcoming discussions of the G–8.

3

Today, we are joined by three distinguished witnesses to discuss

the Commission’s report entitled ‘‘Our Common Interest.’’ It is a

great pleasure to welcome our close friend and former Foreign Relations Committee colleague, Senator Nancy Kassebaum Baker.

She served with distinction for many years as the chair and ranking member of the Subcommittee on African Affairs. She brings extraordinary experience, understanding, and compassion to the challenges facing Africa. And I would simply note parenthetically, that

Senator Kassebaum, during her service, frequently was almost the

only Senator who was interested in Africa, and frequently prevailed

upon this Senator to join her in her office to greet Presidents, Foreign Ministers, and other dignitaries coming from Africa, which I

was honored to do. So my education has been enhanced by my

friendship with our colleague, and it is a special privilege to have

her here today.

We are also joined by her colleague on the Commission, Mr.

Tidjane Thiam from the Ivory Coast, who has served at the World

Bank and as his country’s Minister of Planning and Development.

Our third panelist is the president of the Center for Global Development, Ms. Nancy Birdsall, whose insight and experience in development will lend an important perspective to our discussions.

We welcome our distinguished guests and thank them for joining

us in this discussion. We look forward to hearing their insights on

the Commission’s report and their own personal views.

Let me say at the outset that we know that we will have a series

of votes on the Senate floor, but fortunately not until 11:30. At

least, that is the best word. That is about 2 hours hence, and probably gives us the opportunity for the testimony of our distinguished

witnesses, as well as for questions and dialogs with distinguished

Senators who will join us on this panel. I mention that so that all

Senators and their staffs might be advised that that will probably

be the terminal point for our hearing, as Senators will be engaged

in a stack of votes, and unlikely to return to the committee room.

At this moment, let me turn to Senator Feingold, who has long

served as chairman and ranking member of our African Subcommittee, and who has intense interest in these issues.

STATEMENT OF HON. RUSSELL D. FEINGOLD, U.S. SENATOR

FROM WISCONSIN

Senator FEINGOLD. Thank you, Mr. Chairman, I thank you for

holding this hearing today, and I thank our witnesses for being

here. Of course, I look forward to hearing the views of Mr. Thiam

and Dr. Birdsall, but I am especially pleased to have the opportunity to hear from Senator Kassebaum Baker, who served so admirably as the chair of this committee’s Subcommittee on African

Affairs when I first became the ranking member.

Senator Kassebaum Baker, along with Senator Paul Simon as

well as the chairman, really helped to inspire my great interest in

Africa, and I’ve maintained my involvement in African affairs over

the past decade in part because of their wonderful example. Senator Kassebaum Baker, it is truly a pleasure to see you here today,

and to have this opportunity to work with you again. You know

how much I appreciated our work together.

4

The Commission for Africa produced a weighty report full of interesting insights and ideas, and I commend the Commissioners for

their work. We all know that issuing recommendations and actually changing policies on the ground are two very different things.

At regular intervals we are given the opportunity to bring a new

seriousness and commitment to our engagement with Africa. These

opportunities are often associated with new initiatives financed by

squeezing resources out of the last round of initiatives, or worse,

out of basic development efforts. In between these opportunities,

we often lose momentum, and our policies become reduced to reactions, in the wake of conflict or crisis. But what’s clear—and I obviously know that you are very aware of this—is that we need sustained, thoughtful, coordinated engagement if we are to foster the

real partnerships that we will need in the years ahead.

There’s nothing marginal or soft or somehow second rate about

the nature of the challenge before us. Today, our first foreign policy

priority is to combat the terrorist forces who would do us harm.

And Africa is unquestionably an important part of that effort. The

1998 Embassy bombing, the 2002 bombings in Mombassa, and the

consistent and credible reports of terrorist organizations operating

in North, West, and Southern Africa leave no room for doubt, and

it is easy to understand, if we want strong African partners in our

fight against terrorism, we need to be strong partners ourselves in

Africa’s fight against poverty. The Commission report offers a number of ideas regarding just how we might strengthen our efforts, by

fighting corruption, by strengthening institutions, and by investing

in the African people.

I’d like to hear more about these ideas today, but I’m also interested in about how our panelists believe an American commitment

to sustained, coordinated, multilateral engagement to fight poverty

in Africa might be maintained, despite that impulse to reinvent the

wheel that afflicts every new administration, and often new Members of Congress. Constantly changing casts of characters, and constantly changing competing demands in the donor community, and

in Africa, make it difficult to secure adequate resources—but also

adequate attention, thought, and political will over the long term.

So, I’m looking forward to any remarks today that focus on what

we need to do here to be more effective, responsive, and consistent

in our approach.

I thank the panelists, and I thank the chairman.

The CHAIRMAN. I’d like to recognize now Senator Mel Martinez,

who is the chairman of our African Subcommittee.

STATEMENT OF HON. MEL MARTINEZ, U.S. SENATOR FROM

FLORIDA

Senator MARTINEZ. Mr. Chairman, I thank you very much, and

good morning to all of you, and welcome. I am delighted for you

to hold this hearing and look forward to hearing the testimony

from the witnesses, and I’m especially pleased to welcome Senator

Kassebaum Baker, whom I did not have the pleasure to serve with,

but I’m so honored to follow in your footsteps and in the great interest you’ve had in issues of people around the world. I believe it’s

a tremendous moment for us to come together. Africa undoubtedly

is at a crossroads, and we all, I believe, as citizens of the world,

5

share a moral obligation for the success of the African Continent

and understanding the difficult conditions that exist in much of it.

I believe that our foreign policy focus is too often not made clear,

not being sufficiently focused on areas of the world like Africa as

I often have felt. I know many Latin Americans feel the same way

and I know that it’s a large world, but there’s so much opportunity

for good to be done, and our country carries such a tremendous opportunity that I believe it is part of our responsibility, to look to

these developing areas of the world, particularly now as we focus

on Africa.

And I also was pleased to see in your report that there is an acknowledgement and a recognition that Africa must drive its own

development, and that while nations like the United States should

be supportive, that the success will only come with appropriate

governance and appropriate institutions and Africa, itself, must

take responsibility for the future success of the region.

There is much that we can do by increasing assistance that is

being provided to HIV/AIDS, and the Millennium Challenge Account also, and a focus on counterterrorism as mentioned by the

ranking member of the subcommittee. These are all traditional elements of our development policy and focus, which must be continued into the future. The United States Government, together with

the international community, wants to advance a comprehensive

strategy for Africa, a strategy that focuses on democracy and governance, institution-building, human rights, and sustainable economic growth, a strategy that focuses on building domestic capacity, which will bring about lasting, positive change for the people

of Africa.

So, I’m so pleased to hear and review the Commission’s recommendations, and its efforts to create a coherent policy for Africa,

but I think in general, the analysis and principle behind the Commission report is a solid one, I look forward to hearing from the

panelists this morning in a more comprehensive way. Thank you

very much.

The CHAIRMAN. Thank you very much, Senator Martinez. Let me

mention that the statements of each of the witnesses will be published in the record in full. Each witness may proceed as she or he

wishes, either giving a statement in full, or summarizing. Let me

just say that we are here to hear you, so please do not truncate

your remarks unduly. We are delighted to have each one of you,

and I’ll ask you to testify in the order that I introduced you, originally.

STATEMENT OF HON. NANCY KASSEBAUM BAKER, COMMISSIONER, COMMISSION FOR AFRICA, AND FORMER U.S. SENATOR, WASHINGTON, DC

Senator KASSEBAUM BAKER. Thank you very much, Mr. Chairman. I’ve often wondered what it was like to testify on the other

side.

The CHAIRMAN. Now you know. [Laughter.]

Senator KASSEBAUM BAKER. It may be more fun from up there

than down here, but I am very appreciative of being able to participate this morning, in a hearing on the Commission for Africa report. I’m particularly honored to appear with one of my fellow ComVerDate 11-MAY-2000 13:55 Dec 07, 2005 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 963492.SEN SFORELA1 PsN: SFORELA1
6

missioners, Tidjane Thiam, who has come over from London just

for this hearing. He originally came from Coˆte d’Ivoire, and is a

distinguished businessman now in London. I’ve benefited greatly

from his wisdom during the Commission debates, so I’m particularly pleased that he could be able to testify with us this morning.

As you know, and as mentioned, Mr. Chairman, we were brought

together by Prime Minister Blair to look at Africa’s challenges and

propose some suggested policy direction, which he was to present

as head of the G–8 meeting in July. We released our report, ‘‘Our

Common Interest,’’ in March, as a total package of interrelated recommendations as well as the price tag. The Commission’s report

seems overwhelming. Many Africans would say, ‘‘We have heard all

of this before. We know what the problems are, so why are the proposals—are the proposals any good faith over the years.

As one of the 17-member Commissioners, I believe that one of

the significant reasons for attention to the report, is that unlike

previous studies, the majority of the Commissioners came from Africa. These Commissioners emphasize the importance of Africans

themselves, demonstrating the necessary leadership to address,

‘‘the weakness of governance and the absence of an effective state.’’

Africa is changing, and a younger generation wants to break the

cycle of loss. This is an opportunity, not to just make a pledge of

support, or a nod to financial aid, but to step forward and work together constructively to make a difference. I also believe the Commission reflected Prime Minister Blair’s personal and genuine commitment to Africa’s future. The Commission was not a political ploy

or public relations exercise. It represented a serious and sincere attempt to help Africa move forward.

President Bush and many of the other G–8 leaders share the

Prime Minister’s commitment. In this report, we outline some important new directions on coordination and institutional sustainability. While the many recommendations form an integral part of

the whole, I believe we should identify one or two immediate priorities to concentrate attention and financing, to show what works

and if such an approach can be successfully replicated in other

areas. The amount of money, in many ways, is not as important

as the effectiveness of the delivery system. What is exciting to me

is the opportunity to show what might be accomplished with restructured approaches. First, the Commission recognizes the foundation of Africa’s progress begins with better leadership on the African Continent. Many of the failings of Africa over the past decade

can be traced to the lack of effective and accountable government.

Without these effective and accountable governments, Africa cannot progress, no matter how much money is provided.

To improve governance, the report highlights the importance of

helping Africa develop effective civil service administrations, independent judiciaries, and strong parliaments. Fighting corruption is

essential. We must find better ways to stop the players with bribes,

including multinational corporations, and those who solicit and

pocket bribes on the African Continent. Again, that’s a tall order,

and I’m sympathetic to what Senator Feingold said about being

able to sustain these things that we address so often, and the reason I’m encouraged, as I’ve said, is I think there are leaders today,

7

such as Mr. Thiam here, who represent a change, and recognize

that change is taking place on the continent.

The report highlights the role that increased foreign assistance

can play in Africa’s development. Many of the press articles about

the Commission report have emphasized the foreign aid numbers.

But to me, again, as important as the amount of foreign assistance,

is the method of delivery. I’ve long been frustrated by the uncoordinated, highly bureaucratic ways we provide foreign assistance in

Africa. Every donor seems to have his or her pet scheme, with little

effort to consolidate approaches. The proliferation of initiatives undermines effectiveness of foreign assistance. Even in our own government, the numerous government agencies involved in development assistance makes it difficult to coordinate.

The report recognizes that we must improve the ‘‘quality’’ of aid.

I believe the American people, and people throughout the developed

world who will support increases in assistance, if they know the

money will make a difference in improving the lives of Africans. I

believe strongly that we should build on the strength of public/private partnerships, such as the Bill and Melinda Gates Foundation,

or the recently announced Clinton Global Initiative. But as an example of one that I’m familiar with, I would like to talk about the

partnership in the healthcare field of the Kaiser Family Foundation, which has successfully maintained involvement in South Africa since 1987. Since that time, the foundation has committed about

$200 million, and leveraged three times that amount from other

funders in support of South African’s efforts to establish a more equitable, national public health system. In the total picture, financial needs in African health services, that is not a large amount.

And I am very appreciative, Mr. Chairman, of your initiative regarding AIDS support for orphans. This is an extremely important

area needs now to be met to address the future.

However, the basic principles that guided the Kaiser Family

Foundation work have proven most successful. One is the collaborative partnership with the host country, working with South Africa to see what was needed, encouraging those in the public health

sector to work together to achieve these results. Second, external

funders were engaged in local policy context. This provides the

local government a sustainable stake in success of a national

health program. It has proven to be a most successful program, and

I believe it’s because its early groundwork was done with the host

country, with local institutions that were needed to sustain a program over the long term. So often we race in, and then we race out,

and then again, we reinvent the wheel. So that’s why I use that

as an example that, I think, merits our thinking about.

The Commission report proposes the creation of an infrastructure

fund to support the development of roads, railroads, and rivers.

This is an area that can provide jobs and begin immediately to enhance the economy, not only by money in the pocket, but also by

facilitating the movement of goods to both domestic and international markets. We argue about being able to encourage trade,

it can’t be done if there is not the roads and railroads over which

to take it, both to get it to port, or get a better trade buy between

countries within the continent.

8

Again, public/private funding partnerships, I believe, could be

most successful. Coordinated management with the regional government can serve as a model of a new approach that has been

tried sometimes in limited ways, and where it has been, it can be

proven to be successful. This does not require a Marshall Plan idea,

as much as it does a grassroot level approach, and tough management. The success of the Marshall Plan was that it was a business

approach with a clear understanding of institutional sustainability.

I skip over many important Commission recommendations, but

by just naming a few, it gives an idea of the width and depth of

the integrated plan. Debt cancellation, corruption, education,

strengthening governance, ending trade barriers and subsidies, especially for cotton and sugar, and environmental sustainability.

Education, as we all know, is particularly important, and is needed

to provide the engineers, the mechanics, the craftsman, the teachers, the nurses and the doctors. There can be no more important

legacy one leaves from one generation to another, than quality education.

The report also stresses the most important voice in Africa. One

which is seldom heard—the women. As in most countries, women

are the backbone of family and community. Their voices are critical

to hear, through democratic processes and leadership positions. I’m

absolutely confident, Mr. Chairman, that those voices could make

a big difference in the future of Africa.

Last, I mention security, and I think this is a subject that Mr.

Thiam will cover in more depth, but it’s the basic desire for us all.

And no one can thrive, nor can a country grow without a sense of

security and hope. It is security from wars, from disease, and from

poverty. Poverty and the sense of hopelessness can affect all else,

and all too frequently can lead to participation in renegade terrorist groups. I would just like to report, and I—the recommendation of the Commission won its strongest support from the African

Union in undertaking a dedicated effort for mediation—but control

of small arms is a major concern to Africa and last August I was

in the Democratic Republic of Congo and saw their buyback plan

that was being tested by the U.N. funding. I would have to say just

from my initial operation, it was not fully operating, but it was set

up to start. I think other initiatives should be given a try. I personally wish we could consider not just buyback for arms turned in,

but again, money that would be given as payment for work done

in building a health center or a school or road work so that there

is a job as well for turning in arms, otherwise there’s not much to

be offered except what is money in the pocket.

We must also move faster to support reconstruction after conflict

ends, and during this trip in the Congo, I was shocked by the slow

progress to reconstruct the country. The plans were drafted, the

money was there, but projects had yet to get off the ground, I think

largely because there had been such a slow effort to be able to pull

together coordination. We risk losing the peace in the Congo, and

other post-conflict situations, unless we can move faster to build

the peace.

As President George W. Bush has said, ‘‘persistent poverty and

oppression can lead to hopelessness and despair, and when governments fail to meet the most basic needs of their people, these failed

9

states can become havens for terror. Development provides the resources to build hope and prosperity and security.’’ There are no

better words, I think, Mr. Chairman, to describe the importance of

Africa’s future, and our common interest.

One word of caution: We must be careful that we don’t promise

more than we can deliver and we must fund what we promise.

Thank you, Mr. Chairman.

[The prepared statement of Senator Kassebaum Baker follows:]

PREPARED STATEMENT OF HON. NANCY KASSEBAUM BAKER, COMMISSIONER, COMMISSION FOR AFRICA, AND FORMER U.S. SENATOR, WASHINGTON, DC

Mr. Chairman, thank you for the opportunity to discuss the Commission for Africa

report. I am particularly honored to appear with one of my fellow. Commissioners,

Tidjane Thiam. Tidjane originally comes from Ivory Coast, and is now a distinguished businessman in London. I benefited greatly from Tidjane’s wisdom during

the Commission debates, and am so pleased he was able to join the committee

today.

As you know, Tidjane and I were 2 of 17 Commissioners brought together by British Prime Minister Tony Blair to look at Africa’s challenges and propose some suggested policy directions. We released our report, ‘‘Our Common Interest,’’ in March.

As a total package of interrelated recommendations, as well as the price tag, the

Commission’s report seems overwhelming. Many Africans would say, ‘‘We have

heard all of this before.’’ We know what the problems are so why are the proposals

any different from the many other plans that have been developed in good faith over

the years?

As 1 of the 17-member Commissioners, I believe that one of the significant reasons for attention to the report is that unlike previous studies, the majority of the

Commissioners come from Africa. These Commissioners emphasized the importance

of Africans themselves demonstrating the necessary leadership to address ‘‘the

weakness of governance and, the absence of an effective state.’’ Africa is changing

and a younger generation wants to break the cycle of loss. This is an opportunity

not to just make a pledge of support or a nod to financial aid, but to step forward

and work together constructively to make a difference.

I also believe the Commission reflected Prime Minister Blair’s personal and genuine commitment, to Africa’s future. The Commission was not a political ploy or

public relations exercise; it represented a serious and sincere attempt to help Africa

move forward. President Bush and many of the other G–8 leaders share the Prime

Minister’s commitment.

In this report, we outlined some important new directions on coordination and institutional sustainability. While the many recommendations form an integral part

of the whole, I believe we should identify one or two immediate priorities to concentrate attention and financing to show what works and if such an approach can

be successfully replicated in other areas. The amount of money, in many ways, is

not as important as the effectiveness of the delivery system. What is exciting to me

is the opportunity to show what might be accomplished with restructured approaches.

First, the Commission recognizes that the foundation of Africa’s progress begins

with better leadership on the African Continent. Many of the failings of Africa over

the past decades can be traced to the lack of effective and accountable governments.

In our discussions, I was particularly struck by the arguments coming from the

African Commissioners, who emphasized the importance of Africans themselves

demonstrating the necessary leadership to address the weakness of governance and

the absence of an effective state. Without this leadership, Africa cannot progress,

no matter how much money we provide.

To improve governance, the report highlights the importance of helping Africa develop effective civil service administrations, independent judiciaries, and strong parliaments. Fighting corruption is essential. We must find better ways to stop both

the payers of bribes, including multinational corporations, and those who solicit and

pocket bribes on the African Continent.

The report highlights the role that increased foreign assistance can play in Africa’s development. Many of the press articles about the Commission report have emphasized the foreign aid numbers. But to me, as important as the amount of foreign

assistance, is the method of delivery.

I have long been frustrated by the uncoordinated, highly bureaucratic ways we

provide foreign assistance in Africa. Every donor seems to have his or her pet

10

scheme, with little effort to consolidate approaches. The proliferation of initiatives

undermines the effectiveness of foreign assistance. Even in our own government, the

numerous government agencies involved in development assistance makes it difficult to coordinate.

The report recognizes that we must improve the ‘‘quality of aid.’’ I believe the

American people—and people throughout the developed world—will support increases in assistance if they know the money will make a difference in improving

the lives of Africans.

We should build on the strength of public/private partnerships, such as the Bill

and Melinda Gates Foundation or the Clinton Global Initiative. An example of one

such partnership in the field of health care is the Kaiser Family Foundation which

has successfully maintained involvement in South Africa since 1987. Since that

time, the foundation has committed about $200 million and leveraged three times

that amount from other funders in support of South African efforts to establish a

more equitable national public health system. In the total picture of financial needs

in African health services that is not a large amount. However, the basic principles

guiding the work have proven most successful. One is the collaborative partnership

with the host country. External funders have engaged local policy context. This provides the local government a sustainable stake in the success of a national health

prcgram.

The Commission report proposes the creation of an infrastructure fund to support

the development of roads, railroads, and rivers. This is an area that can provide jobs

and begin immediately to enhance the economy, not only by money in the pocket

but also by facilitating the movement of goods to both domestic and international

markets. Again, public/private funding partnerships, in coordinated management,

with the regional governments could be a model. This does not require a Marshall

Plan idea as much as it does a grassroots-level approach and tough management.

The success of the Marshall Plan was that it was a business approach with a clear

understanding of institutional sustainability.

I skip over many important Commission recommendations, but by just naming a

few it gives an idea of the width and depth of the integrated plan—debt cancellation, corruption, education, strengthening governance, ending trade barriers and

subsidies (especially for cotton and sugar), and environmental sustainability. Education is particularly important, as it is needed to provide the engineers and mechanics, the craftsman, the teachers, the nurses and doctors. There can be no more

important legacy one leaves from one generation to another than quality education.

The report also stresses the most important voice in Africa, one which is seldom

heard—the women. As in most countries, women are the backbone of family and

community. Their voices are critical to hear through democratic processes and leadership positions. I am absolutely convinced this is a network that could make a difference.

Last, I mention security. Security is the basic desire for us all. No one can thrive

nor can a country grow without a sense of security and hope. It is security from

wars, from disease, and from poverty. Poverty, in the sense of hopelessness, can affect all else and all too frequently can lead to participation in renegade terrorist

groups. The Commission makes several recommendations to prevent conflict

through mediation. The African Union is undertaking a dedicated effort in this direction. Control of small arms is a major concern to Africans. Buy-back plans are

being tested in the Democratic Republic of the Congo. Other initiatives should be

tried. Funding should be increased for the African Standby Force. A well-trained,

disciplined, and well-paid African peacekeeping force could serve an important function.

We must also move faster to support reconstruction after conflict ends. During my

trip to the Congo, in August, I was shocked by the slow progress to reconstruct the

country. The plans we drafted, the money was there, but projects had yet to get off

the ground. We risk losing the peace in the Congo—and in other post-conflict situations—unless we can move faster to build the peace.

As President George W. Bush has said, ‘‘Persistent poverty and oppression can

lead to hopelessness and despair. And when governments fail to meet the most basic

needs of their people, these failed states can become havens for terror. Development

provides the resources to build hope and prosperity and security.’’ There are no better words to describe the importance of Africa’s future and ‘‘Our Common Interest.’’

One word of caution—we must be careful that we don’t promise more than we can

deliver and we must fund what we promise.

The CHAIRMAN. Thank you, indeed, for that very thoughtful testimony. You have helped introduce your colleague on the Commission, and we look forward to hearing now from you, Mr. Thiam.

11

STATEMENT OF TIDJANE THIAM, COMMISSIONER, COMMISSION FOR AFRICA, AND DIRECTOR, GROUP STRATEGY AND

DEVELOPMENT, AVIVA, LONDON

Mr. THIAM. Thank you, Mr. Chairman.

I’d like to thank Senator Lugar, and your colleagues on the Senate Foreign Relations Committee for inviting me to give evidence

on the Commission for Africa today. I would just like to thank

Nancy Kassebaum for her very useful comments and for all the insights and assistance she gave me, I have every intention to continue benefiting from that assistance.

I would like to provide you with some written evidence in the

form of a letter, my comments now will draw mainly on the contents of that letter. And I would like to open my contribution by

stating that I believe that Africa’s growth and development are

first and foremost an issue for Africans. Because of the nature and

the mandate of the Commission, we are focused on recommendations on what the international community can do, however, the

Commissioners, and all the African Commissioners recognize that

the primary factor for Africa’s development, for its successes and

failures, remain with Africans and African institutions, such as the

African Union and NEPAD.

Negative perceptions of Africa abound. One just has to open a

newspaper or turn on the television to hear about the violence in

Zimbabwe, deaths in Sudan, and poor governance. But next to a

visible and failing Africa, I would claim that there’s a more discrete, hardworking, and more successful Africa.

In 1999 in my country, a power plant was designed and built by

African engineers, and financed entirely by the private sector. I led

the team of African experts that designed and negotiated that public/private partnership. This project was nominated by the Financial Times as one of the six boldest energy projects in the world

that year. As we speak, 170 young women work in a plant in Morocco, producing some of the most sophisticated components for net

systems in the world. One of the most productive tuna factories in

the world is in West Africa. If I look at a company like Nestle ́, which has thousands of employees in Africa, it runs all its African

factories without any expatriates. So there are many, many positive stories on the continent.

There is enough coverage of the African tragedy. What matters

now is to convince the world that something can be done about it.

Most deaths in Africa are entirely avoidable; preventable. Just to

take an example, I’m sure you know that the first cause of child

mortality in Africa is not AIDS or malaria, it is diarrhea. Babies

die of dehydration, because their mothers do not know how to take

care of them when they are sick. That is an education and information problem. Several countries have tackled it very cheaply and

very effectively. There are solutions that work, that are known. We

know we can implement them by empowering people.

I’d just like to touch quickly on four areas: The first one is peace

and security, the second one is trade, the third one is AIDS, and

then to finish, the implementation of our recommendations.

Africa is plagued by many conflicts. Our report contains many

important proposals to help us prevent conflicts. Until my country,

Coˆte d’Ivoire, became better known for coups and instability, it was

12

recognized as an African success story. There I have seen, firsthand, how the achievements of 40 years of progress can be destroyed in less than a year. Coˆte d’Ivoire’s conflict and ultimately

its solution are the responsibility of I’vorians. But diplomats and

donors did not help by ignoring the tensions in the country, increased pressure on land, the politicization of ethnic identities, the

impact of regional tensions on our internal policies. It didn’t help

when donor countries so quickly recognized and even supported the

government of General Guei, and failed to support the efforts of our

neighbors and of the African Union to sanction him and his government. I must say that that was not the case for the United States

which took a very firm position on this issue and did not cooperate

with General Guei’s regime.

The Commission therefore argues in favor of greater and more

effective support to strengthen African organizations—the AU and

NEPAD—and their ability to promote good governance and security. All societies have to deal with tensions and potential conflicts.

What is often missing in Africa are the tools and mechanisms to

resolve these tensions and conflicts in a nonviolent manner. I

would hope that the large international consensus on the importance of peace and security, will lead to more resources being devoted to conflict prevention, and peace-building in Africa, as Nancy

explained very eloquently. Without peace and security, there will

be no development. We need to support vulnerable states, the socalled ‘‘fragile’’ states, as they are a prime recruiting ground for

terrorist organizations, as Senator Feingold mentioned. In my

country, we say that no community should aspire to be an oasis in

the desert, because generally it’s the desert that wins.

Moving on to my second topic, trade and economy, it is important

that the international trade system be managed in a way that allows farmers in the rural communities in Africa to make a living

and raise their families. Africa has two things in abundance—land

and sun. Agriculture is therefore one of the key areas, as you said,

Mr. Chairman, where it can aspire to enjoy comparative advantage.

Our farmers cannot compete with the subsidized meat, flour, milk,

and butter coming from the OECD, and the poor in the cities of

Coˆte d’Ivoire eat bread made with subsidized EU flour, with subsidized French butter, and that is a tragedy.

African economies are still hampered by unfair barriers to trade,

and subsidies in the developed world. The forthcoming Doha Development Agreement is a prime opportunity to change this situation

for the better. Our proposals in this area are among the most important.

I’d like to say a few words now about aid. My country, before conflict, was one of the leading recipients of aid in Africa. As a Minister, I was responsible for several years for coordinating that aid,

and I am one of many Africans who have experienced the negative

impact of unaccountable international development agencies. I

have developed a matrix of the conditions that my country had to

meet—there were hundreds of them at any point in time. That was

clearly, for me, the symptom of a system that had gotten out of

control.

Indeed, much of the report is focused on how to make aid more

effective. This will involve actions from the donor countries of

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course, but also the recipient countries. I recognize the damage

done by corruption, and that aid has become an unpopular concept

now in most of countries because of joint experiences. That being

said, we call for better cooperation between Africa and the rest of

the world, and we think that institutions like the World Bank have

a primary responsibility here. I hope that Paul Wolfowitz’s leadership of the World Bank will oversee many of the changes in culture, including allowing countries to determine their own priorities,

and reducing the amount of resources spent on international experts, bureaucrats, and controllers. Out of the 11 billion United

States dollars of aid to Africa, $3 to $4 billion are spent on expertise and controllers, which is generally not African expertise. You

have more than 100,000 Africans working in the United States

when at the same time extremely expensive technical assistance is

used in Africa, and sourced from the outside world, regularly. That

situation has to be addressed.

One of the areas where aid can be most effective is education.

Nancy Kassebaum mentioned education for women. We conducted

a study in Coˆte d’Ivoire which showed that women, illiterate

women in the countryside, have 8.2 children on average, and educated women in the cities have 3.2 children. You can see that the

prospects of these children and their future will be completely different in one of these situations or the other. Education of women

has to be at the center of development. We all regret the corruption

that prevails in many places in Africa. My experience has convinced me that one cannot buy good governance with

conditionalities. Here in America, the guardians of democracy are

its citizens, the men and women of this country. Africa will have

sustainable democracies only when its men and women are educated and well informed. They will then hold their leaders accountable, and make corruption unacceptable.

I have read Mark Twain, and we all know that the high standards which you enjoy in public life, and that the whole world admires, were achieved over many decades and many battles for

transparency in government, for a free press, and for an independent and strong judiciary.

Finally, I would like to make a few comments on how the Commission’s findings should be implemented. The report proposes a

comprehensive treatment of the issues, offering some new ideas,

but focusing in many places on how to implement and keep commitments and hold ourselves accountable for what we promise. Implementation of such a comprehensive report is going to be a challenge, and will require commitment from both African and G–8

governments.

Two thousand and five presents many opportunities for making

real changes for the benefit of Africa and of the world. The G–8

Summit, the Millennium Review Summit in September, and the

Hong Kong WTO meetings in December, offer real opportunities to

take forward our recommendations. We are not calling upon each

government to do everything. We think that countries should build

on their recent activities and strengths in taking forward this agenda. The United States has already recognized that Africa is changing for the better, and given its support to that. It has substantially increased its commitment to Africa in recent years, and set

14

up programs such as the Millennium Challenge Account, and

PEPFAR for HIV. The United States has a strong historical interest in Africa and there are many private connections between our

two countries; my own wife is American and used to work in this

building for Senator Biden. America historically has had a very

strong interest in the private sector and investment, and building

the capacity of African countries to trade. It has also supported

transparency and anticorruption initiatives, and efforts to promote

security in Africa, and I believe that the United States can build

on this, and with other G–8 countries, use their influence to make

sure that the most significant obstacles to growth in Africa are removed.

In conclusion, I would like to thank you again for inviting me to

Washington to give evidence on the Commission report and for

your interest in this work. I believe that by putting our

intelligencies together we can build a better future for the children

of Africa, thank you.

[The prepared statement of Mr. Thiam follows:]

PREPARED STATEMENT OF TIDJANE THIAM, COMMISSIONER, COMMISSION ON AFRICA, AND DIRECTOR, GROUP STRATEGY AND DEVELOPMENT, AVIVA, LONDON

Dear Senator Lugar: I am sending this letter as my written submission to the

Senate Foreign Relations Committee hearing on the Commission for Africa on 17

May.

First, let me begin by thanking you for the opportunity to appear before the committee. It is an experience I look forward to. The support of the United States is

vital to development in Africa, and for the successful implementation of the Commission for Africa’s recommendations.

The committee has already received copies of the report and briefing materials on

its contents. So rather than recapitulating its contents in detail, I wanted to focus

my written comments on why there is a need for urgent action, and what I expect

the results of successful implementation would be from my own experience.

I, and most Africans in my generation, believe that Africa’s growth and development are, first and foremost, an issue for Africans. External assistance must complement a movement from inside Africa—on governance, on preventing and resolving conflicts, and on developing the policies that will achieve development and

growth. Because of the nature and the mandate of the Commission, we have focused

our recommendations on what the international community can do. The primary responsibility for Africa’s development remains with Africans and African institutions

such as the African Union and NEPAD.

We present a comprehensive package, which includes governance, peace and security, health and education, growth and infrastructure, trade, aid effectiveness, and

making international institutions fairer and more effective.

Why Africa?

There are many arguments for why Africa needs action on these issues. Many cite

the moral reasons—and also the developed world’s self-interest, relating to the global threats created by the failure to check the spread of disease and conflict in Africa.

But for me, the real message is one of fairness and opportunity. Contrary to popular perception, Africa already presents many opportunities. Many African economies are growing. Many international businesses have seen the opportunities presented by Africa, and are making profits there. A recent study commissioned by

Vodafone shows that Africa is the fastest growing mobile phone market in the

world—increasing by 1,000 percent in the past 5 years. International companies

make profits from growing markets and opportunities in Africa, create employment

in Africa, and build their businesses on the expertise of their African workforces.

To allow the kind of growth that will allow Africans to find their way out of poverty, Africa needs a level playing field. This means reform to eliminate agricultural

subsidies, and other trade barriers. Also, Africans must be empowered to find their

own solutions to their own problems, which means democracy (to guarantee basic

human rights), market economies which will attract foreign direct investment and

create jobs, education (which will allow them to identify and seize opportunities),

and rule of law and peace and security, which will allow them to enjoy the fruit

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of their efforts. All governments know civil unrest and crime are serious risks when

people do not have opportunities and employment—and this goes particularly for

the young.

The international community—particularly G–8 countries—have the opportunity

to build on the positive political and economic developments. If we do not act now,

then the opportunities for long-term change could be squandered.

What do we want to achieve?

The Commission makes ambitious recommendations about how to create this level

playing field, how to ensure Africa has the capacity to take advantage of greater

opportunity, and how to check those factors that threaten to hamper progress, such

as instability and HIV and AIDS.

From my own experience as a Minister in Coˆte d’Ivoire, I can suggest the following outcomes of implementing the recommendations of the Commission for Africa.As you know, until the late nineties and the coup in 1999, Coˆte d’Ivoire was often

identified as an African success story—with high rates of growth and an economy

that attracted inward migration from its neighbours. The picture is now a very different one. Now that instability has taken hold in Coˆte d’Ivoire, the costs to economic development and poverty reduction have been done—and it will take a long

time for the country to recover. As in Rwanda, DRC, Sudan, Angola, and throughout

West Africa, the costs to African development of failing to prevent conflict are hard

to calculate. Much more needs to be done sooner if we are not to see farther reversals in Africa’s fortunes.

The demise into conflict in Coˆte d’Ivoire is ultimately the responsibility of national

actors, but the international community could have done much more to influence

events.

For a long time, donor and diplomats ignored growing tensions over land, growing

inequality between groups, nationality, and political power.

Also, following the coup in Coˆte d’Ivoire, donor governments were quick to

recognise military regime, and in some cases, supported it. In contrast, the

Organisation for Africa Unity refused to recognise it and barred the then-President,

General Guei, from attending its summit in the summer of 2000. Having seen the

impact of the conflict on Coˆte d’Ivoire and imagining what its long-term impact will

be, it seems that following African leadership would have been the better option for

the international community.

The Commission makes recommendations on how to improve future responses by

making donors better at identifying and acting on the risks of instability, and by

strengthening African regional means of promoting improved governance and conflict through support for the AU/NEPAD Africa Peer Review Mechanism and African

Union and regional organisations’ operations to prevent and resolve conflict.

We also argue that the international community must focus on weak and conflictaffected states, as well as ‘‘good performers,’’ as the latter are also vulnerable to

spreading instability. Regional insecurity, particularly in Liberia and Sierra Leone,

also brought refugees and the risk of instability in Coˆte d’Ivoire. Politics and stability in Coˆte d’Ivoire, like so many other countries, was impacted by the easy access

to arms in West Africa, largely financed by blood diamonds. We make recommendations aimed at increasing transparency in extractive industries and control the use

of natural resources such as diamonds to finance conflict, as well as controlling

arms flows.

Much of our report is about making aid more effective, not least our recommendations on international institutions. Whilst in government in Coˆte d’Ivoire, I suffered

the impact of international agencies unaccountable to recipient governments and

whose staff placed true ownership and understanding of the context beneath their

own priorities and views. Aside from the impact on relationships, low effectiveness

and accountability of international institutions reduces the effective use of development resources. The Commission calls on the International Financial Institutions

(IFIs), such as the International Monetary Fund and the World Bank, to increase

their focus on Africa and to make their governance and internal structures more

conducive to effective and accountable operations. The countries must be left free

to determine their priorities and spend the money in the most cost effective way.

The IFIs give roughly USD 11 billion to Africa; 3 to 4 billion of that amount are

spent on experts, bureaucrats, and controllers—on every dollar of aid 70 to 80 cents

go straight back to developed countries.

Despite Coˆte d’Ivoire’s earlier successes, agricultural subsidies and trade barriers

in OECD countries did great harm to our economy, particularly agriculture. African

farmers cannot compete with the subsidised meat, flour, milk, and butter coming

from the OECD. Higher duties on processed cocoa products than raw beans discourVerDate 11-MAY-2000 13:55 Dec 07, 2005 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6621 963492.SEN SFORELA1 PsN: SFORELA1
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aged added value. The forthcoming Doha Development Agreement is a prime opportunity to change policies on these tariffs and subsidies, as we recommend in our report. Alongside our recommendations to increase investment in the capacity to

trade, infrastructure, and means to improve the climate for private sector growth

and investment, this would enable agriculture to grow in African countries and for

growing populations to be fed as well as promoting growth and economic development. We support the creation of an Africa Enterprise Challenge Fund to support

private sector initiatives that contribute to small enterprise development—an initiative that has already elicited interest from the United States.

Education has to be at the root of development and accountable governance. Without education, the public are vulnerable to manipulation and are ill-equipped to hold

politicians to account. Education of girls and women is essential to development.

Women who are educated are far more likely to have greater space between children, reducing vulnerability to poverty and promoting healthier families. The Commission recommends that African governments develop measures to get girls as well

as boys into school and that donors provide support to these steps. Many people in

the United States and Europe would be surprised to hear that children in most African countries do not have access to free basic education—fees for education are common. In Uganda, when user fees were removed, enrollment of the poorest girls doubled. The Commission recommends that donors provide financing that enables the

removal of these fees.

What are we asking of G–8 countries?

The United Kingdom’s forthcoming presidencies of the EU and G–8 were a strong

factor behind the creation of the Commission for Africa by Tony Blair. The final report makes strong, action-focused recommendation that require resources and political commitment from a range of actors, not least G–8 and EU countries.

We are not expecting each government to do everything. There are clear areas

where individual governments have strengths. The United States has increased its

commitment to Africa and to development in recent years: Doubling its aid to Africa,

and creating the Millennium Challenge Account and PEPFAR programmes, and implementing AGOA. This shows a recognition of, and commitment to, supporting

change in Africa. The United States has shown a strong interest in issues such as

HIV and AlDs, promoting good governance and a good climate for private sector

growth and investment, and building the capacity of African countries to trade. It

has shown support for transparency initiatives, such as the Extractive Industries

Transparency Initiative and the African Union and regional efforts to promote security, and has been active in steps to promote the tracing of illicit assets.

The United States can aid the implementation of the Commission’s recommendations and promote further development in Africa by building on these achievements

and its existing experience in the areas of where it has already shown an interest.

The United States can also provide support to a strong statement from this year’s

G–8 summit, action at this year’s Millennium Review Summit, including support for

U.N. reform, and in Hong Kong to promote a Doha Development Agreement that

provides real progress for developing countries.

We also call upon G–8 countries and others to use their influence in the international system to ensure that international organisations—such as the World

Bank, International Monetary Fund, and the United Nations—work well and in the

interests of Africa.

The CHAIRMAN. Well, thank you very much, Mr. Thiam. We’re

delighted to know of your family ties to the Senate, likewise.

I’d like to call, now, upon Ms. Birdsall for her testimony.

STATEMENT OF NANCY BIRDSALL, PRESIDENT, CENTER FOR

GLOBAL DEVELOPMENT, WASHINGTON, DC

Ms. BIRDSALL. Thank you very much, Senator Lugar and members of the committee, I feel privileged. Thank you, Senator Kassebaum Baker who understands the way things work here. Thank

you for this opportunity to appear before this committee to talk

about Africa and the excellent report, ‘‘Our Common Interest.’’

I must say it’s always, for me, in testifying before a committee,

a wonderful reminder of the privilege we have as Americans in

benefiting from our impressive system of government, so it’s a special pleasure to be testifying today with a former Senator and disVerDate 11-MAY-2000 13:55 Dec 07, 2005 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6602 963492.SEN SFORELA1 PsN: SFORELA1
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tinguished member of the committee, and I thank her and Mr.

Thiam for the tremendous contribution they made as Commissioners, working on this report.

I would like to see my full testimony entered in the record, and

instead of trying to go through a lot of it, because I am a policy

wonk, it’s long, I’d like to bring up a couple of specific issues. In

fact, what I’ll do is remark quickly on why I think this report is

so timely, and then comment on the major recommendation for the

outside world, not the only, certainly, but the major one, and then

move to how the United States might support the work of this

Commission in the run up and at the G–8 Summit.

I would like to associate myself, right away, with virtually all of

the testimony already provided by my two colleagues, particularly

on issues like education, girl’s education, the responsibilities of the

rich countries on the trade side, the problem of the fragmented,

and really chaotic, donor system, responsibility in the United

States, and other OECD countries to fight bribery, illegal capital

flight, to do our part on that score.

A word on why the report is timely. This was emphasized by Mr.

Thiam, and by Nancy Kassebaum Baker—the African governments

and peoples have made a real point of saying they’re in charge, and

they feel accountable, and this Commission report emphasizes the

partnership of the mutual responsibility of Africans to build sound

and accountable government institutions, and the rich world to provide greater training opportunities and more aid.

The fact is that in the last decade and somewhat more, we have

seen unprecedented progress in Africa, including in areas like

health and education, at rates more rapid than what’s ever

achieved in Western countries. We’ve seen many more countries

enjoying macroeconomic stability, and taking the necessary steps to

ensure that stability, which provides the right environment for private investment, and we’ve seen countries such as Mozambique,

Ghana, and Uganda benefit from rapid and steady per capita

growth. We also have today, in Africa, a real surge in the number

of democracies, compared to 10 years ago. So, it’s the right moment

to work in solidarity with colleagues and governments in Africa.

Let me go to a comment on a key recommendation of the Commission report, and that is the question of resources. The report,

as you know, recommends that there be a doubling of aid to Africa

from $25 billion today, approximately, to another $25 billion a year

between now and the year 2010, and then, for the next several

years after that, to 2015. So, in effect, the report is suggesting that

we have a tripling of aid, if there are results in the first period,

over the next 10 years.

I’d like to make a few comments about that. The first is that the

amounts seem very large if you are dealing with the fiscal pressures in the rich countries. In fact, however, current aid to Africa

is only about $28 per person in Africa, which is hardly a foundation

on which to build sustained growth and development. However, it’s

also true that we have to be concerned and watchful about how

such big infusions of aid would be spent. Let me mention four particular concerns.

One has to do with the speed at which the large increases proposed can be used effectively. The emphasis is on the need for reVerDate 11-MAY-2000 13:55 Dec 07, 2005 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 963492.SEN SFORELA1 PsN: SFORELA1
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cipient governments to be accountable, if aid is to be affected, and

that makes eminent sense. But it is risky to ramp up aid too quickly. For example, too much aid can overwhelm fragile preventative

health efforts and road maintenance programs if the tension shifts

to new investments. In the worst case, it can create pressures for

corruption and patronage, as procurement and expenditure management systems break down. In effect, Mr. Thiam alluded somewhat to these problems of the past. So there are these risks.

Second, the report does not make that explicit the logic of different amounts of aid for different countries, depending on the

countries’ progress in their own governance. The approach that the

Millennium Challenge Account chose. With the Millennium Challenge Account, the plan is to concentrate aid in those countries

with the best governance who are also still very poor, to ensure

that the aid is used well.

A third concern about the recommendations on resources is that

the emphasis is, at least implicitly, on public aid to public entities,

government-to-government aid. I think that the international community needs to be much more creative about how to increase public aid—not just private giving, although that’s important as well—

but public aid that goes more directly to people. Following along

the lines that Nancy Kassebaum Baker referred to in the work of

the Kaiser Foundation.

Fourth, the report does discuss the problem of integrating economies in Africa, so that they can better exploit their own potential

for trading with each other. So, I would call this, in a sense, the

regionalism challenge. But we do need to think much more deeply

about the problems that Africa faces, because it is cut up into so

many small countries. Imagine the economy of Chicago—which is

slightly larger than the economy of all of sub-Saharan Africa—divided into 45 different entities, with 45 direct governors of central

banks, 45 different customs and tariff arrangements and so on. In

that respect, I think that it’s worth thinking very hard about creating centers of excellence that are across countries, say for university training, for research and development, which would help retain African talent, which is now hemorrhaging out of Africa, and

thinking about major investments, as the report does mention, to

enable them to exploit the tremendous benefits implicit in better

training opportunities.

Let me now turn briefly to ideas about what the U.S. contribution could be in reinforcing the recommendations of this report at

the G–8 Summit. And let me say, I think it is absolutely critical

for the President, with the support of Congress, to have some kind

of a visible package in support of Prime Minister Blair and our

partners in the G–8 when he arrives in Gleneagles.

I have five specific points that I’ll mention, I don’t want them to

exclude in any way many of the ideas already presented to you by

my colleagues.

The first has to do with the problems and the challenge of peace

and security in Africa, and the need to ramp up support for the African peace and security architecture, particularly through the African Union. The administration and Congress should work together

to fully support, as a start, a new Office for Reconstruction and

Stabilization at the State Department. We have to commend SenVerDate 11-MAY-2000 13:55 Dec 07, 2005 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6602 963492.SEN SFORELA1 PsN: SFORELA1
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ators Lugar and Biden for the legislative initiative that led to the

creation of that office.

At the G–8 the United States could take major leadership in emphasizing this issue of financing for dealing with the problems of

failing states, both in terms of peace and security architecture, the

AU, but also in terms of finding creative ways to support those societies where government is fragile, or the state itself is fragile.

This is where some creative thinking is needed.

The resources currently on the table for the work that Senators

Lugar and Biden initiated should be seen only as a down payment,

and if the United States could, at least at the G–8 Summit, work

with its partners to say, by next year we need to have a forceful

effort in this area, that would be terrific.

The second issue has to do with the crying need for malaria and

AIDS vaccines, which would be of tremendous benefit in Africa.

Much more aid could be spent effectively to help Africa, but spent

outside Africa, and this is one example where the United States

could take leadership in pressing for a system, something called an

advance purchase agreement, it’s a kind of prize. It’s creating an

advance market which would give incentives to our pharmaceutical

industry and the pharmaceutical firms elsewhere in the rich world

to put their time and energy into developing vaccines. At the moment, because the markets for these vaccines are so limited by the

poverty of the countries that would benefit from them, the pharmaceutical firms have no incentive to invest in them. It’s a risky business, and it does take years of R&D in bringing products to market, as we all know.

At the Center for Global Development, we have laid out the specifics of how an advance market could be created in legal terms and

contractual terms with industry people, with lawyers, and with

economists how this kind of advance market mechanism could be

created. I urge the Congress to urge the administration, at the

least, again, to resolve at the G–8 Summit that this should be

looked at very carefully over the next year. There’s also a pilot program which could be supported more immediately for production of

vaccines, which exist already, but are not being produced in sufficient quantity, where an advance purchase agreement would ramp

up their production, and make a difference in saving lives in Africa.

A third area is debt relief. The Commission recommends 100 percent debt relief for low-income countries in Africa. At our center,

we have made a more specific proposal, which I would hope the administration and Congress would support, which would be for 100

percent debt relief immediately to all countries in Africa and elsewhere with income per capita below $500, and going forward, only

grant aid, grant transfers from the World Bank from the IDA window, as opposed to lending. This would be consistent with proposals that the Bush administration has already made, it would

allow us to move quickly to 100 percent debt relief for a specific

set of countries, and it would incorporate the view that, I think, is

reasonable that for those poor countries which have not yet grown,

they should receive grants only until their income per capita exceeds the amount which suggests that they’re succeeding in growing, and they would be able to pay back debt.

20

I also would urge the Congress to consider seriously the proposal

for highly limited sales of IMF gold used, for example, they are

these very poor countries that have had 100 percent debt relief.

The need to compensate them is, if there’s a price commodity

shock, or if they suffer from a drought, or another weather shock,

is vital to create the environment for their local, private investors

to have confidence, to take risks, and to be entrepreneurs in larger

and larger forums, as Mr. Thiam indicated.

Fourth area is trade, AGOA is making a difference already, as

Senator Lugar mentioned in his opening remarks. We advocate,

very strongly, that AGOA be locked in for at least 10 years, again,

in order to create an environment of confidence for the business

sector, and that the difficult and complicated rules of origin set up

in the AGOA act be addressed more frontally.

And, finally, on the aid system for Africa, I would like to see it

be more multilateral, to have more emphasis on results and evaluation on results, and more emphasis on regional infrastructure and

capacity building. These are areas where the United States could

go to the G–8 Summit with some specific proposals. On more multilateral, I refer to the need to ensure that not only the U.S. bilateral

program to fight the AIDS pandemic, PEPFAR, but also the multilateral Global Fund to Fight AIDS, TB, and Malaria, be adequately

financed in the next 5 years.

On evaluation results, I refer to the leadership that the United

States could take, perhaps, with help from Paul Wolfowitz when he

goes to the World Bank in pushing for some kind of club of donors,

who would create an entity for independent third-party evaluation

of specific programs. It’s key for us to show the American people

what is really working through aid programs. And on regional infrastructure and capacity-building, I refer to the particular

strength that the United States could bring to programs of major

cross-border infrastructure. If we think of the success we had

across States with the U.S. Federal Highway Transport System,

and the complications and the challenges even between States that

that represented, I think we could make a major contribution on

major investments in cross-border infrastructure in Africa, and I

would say the same with respect to centers of excellence at the university level and for research and development.

Thank you very much, Senator Lugar and members of the committee.

[The prepared statement of Ms. Birdsall follows:]

PREPARED STATEMENT OF NANCY BIRDSALL, PRESIDENT, CENTER FOR GLOBAL

DEVELOPMENT, WASHINGTON, DC

INTRODUCTION

Senator Lugar, members of the committee, thank you for this opportunity to appear before the full committee today to talk about the recent report of the Commission for Africa, ‘‘Our Common Interest.’’ I would like to ask that my full testimony

be entered as part of the record, and I will then briefly summarize my major points.

In 2001, I helped found the Center for Global Development, an independent, nonpartisan think tank based in Washington, DC, that is dedicated to improving the

policies of the rich countries vis-a-vis the poorest countries in the world. I am particularly pleased today to comment on the Commission’s report—and to clarify what

I think it means for the United States—because the Commission’s report is such an

eloquent exposition of what rich countries can do for their poor counterparts in the

developing world.

21

If I might, I would like to take this opportunity to thank Nancy Kassebaum

Baker, who was once a member of this distinguished committee, and Tidjane Thiam

for the work that they and their fellow Commissioners have done under the leadership of British Prime Minister Tony Blair.

As you know, all of us in the room have a tremendous opportunity to make

progress in the fight against global poverty this year. Two thousand five is referred

to by many as the ‘‘Year of Development,’’ thanks in part to the work of the Africa

Commission, but also thanks to a number of other mutually reinforcing commissions, events, and milestones. In January, this year, the United Nations Millennium

Project—under the leadership of Jeffrey Sachs—issued a 14-volume report on what

actions are needed if we are to meet a series of international goals to reduce poverty, curb disease, and tackle underdevelopment called the Millennium Development

Goals (MDGs). In July, the United Kingdom will host the annual G–8 Summit in

Gleneagles, Scotland—an event which will focus on development first and foremost.

Moving to September, heads of state from 191 countries will convene in New

York, on the floor of the General Assembly, to assess international progress on development, security, and human rights and chart a way forward on the difficult

issues of U.N. reform. Finally in December, the next round of WTO ministerial-level

trade talks will take place in Hong Kong, where, hopefully, the world will take concrete steps toward a multilateral trading system that is more friendly to developing

countries.

This unusual confluence of events and increased global attention to development

reflects the deepening recognition—among national officials, international organizations, and throughout civil society—that the changes wrought by the new wave of

globalization make reducing poverty and global inequality more possible, more compelling, and more necessary than ever. The United States, as the world’s only superpower and leading ‘‘shareholder’’ in the international financial institutions and the

United Nations, has a particular responsibility and an interest to help move the development project forward. I do not need to remind the members of this committee

that nowhere is this needed more than in sub-Saharan Africa.

In my remaining time, I will comment briefly on progress in Africa, as reflected

in the report of the Commission, then on several of the Commission’s key recommendations, and finally on the nature and kind of support the United States

should signal for Africa’s development at the upcoming G–8 Summit.

A TIMELY REPORT, IN THE RIGHT SPIRIT

The spirit of the report and the depth of its analysis should be warmly welcomed.

The report emphasizes the mutual responsibility—of Africans and their governments to build sound and accountable government institutions, and of the rich world

to provide greater opportunities and more aid. It incorporates lessons of the last 15

years on the need for help from outside to come in the form of solidarity and partnership across the board, with respect to trade and peacekeeping as well as additional aid, and for aid to be not merely higher in quantity, but ‘‘better’’: More predictable, untied, in the form of debt relief and grants, and most of all supportive

of capable and committed governments’ own priorities.

The report is timely because it builds on a decade of considerable success, in at

least some countries in Africa, in many arenas: Unprecedented (by historic standards in the West and in Asia) increases in educational opportunities and access to

basic health care, newfound macroeconomic stability, and in such countries as Mozambique, Ghana, and Uganda, steady per capita growth. These classic development

successes have been accompanied by, and reinforced on, the security and political

fronts. Though conflicts persist, many have been resolved thanks to leadership within Africa, and today Africa has a dozen working democracies compared to just three

a decade ago.

COMMENTS ON SOME KEY RECOMMENDATIONS

The package approach. The report emphasizes the need for Africans to attack

their problems on multiple fronts at once: Trade, investment in people, infrastructure, and the nitty gritty of improving government budget management and accountability. This provides a rationale for the proposed major increase in aid for Africa. Yet even the more competent governments in Africa have limited capacity to

manage simultaneously multiple new investments and social delivery programs as

well as better auditing, introducing the rule of law, undertaking judicial reform and

so on. Their biggest challenge may well be to set priorities in the deployment of

their scarce administrative resources—which large infusions of new aid cannot easily ‘‘buy.’’ Fortunately, the experience of successful countries—Korea, India, Chile—

is that doing a few things right, in particular to encourage local private investment,

22

can trigger a sustained growth process; and that avoiding privileging insiders (i.e.

getting the politics reasonably right) goes a long way to ensuring that the poor capture some of the resulting growth gains.

The hard part is deciding on those initial ‘‘few things.’’ They have to be invented

and led locally, by leadership that is savvy about local institutional and political

openings (and constraints). In Ghana investing in rural roads may be the quickest

route to raising girls’ education—by increasing rural incomes and reducing costs of

transport to markets. In Ethiopia, education, agriculture and AIDS programs may

depend more than anything else on implementing per capita block transfers to new

local governments. In Mozambique, the most critical next step may be to address

the regulatory and banking problems that reduce access to credit for the working

poor. Another $50 billion in annual aid transfers. The Commission’s proposed increases

in aid are trivial in terms of the rich world’s wealth, and are well below amounts

other countries received at critical moments in their development. South Korea received nearly $100 per person (in today’s dollars) in annual aid between 1955 and

1972. Botswana, the world’s single fastest growing country between 1965 and 1995,

received annual aid flows averaging $127 per person. (It did so by combining rapid

expansion of diamond exports with exceptionally good governance.) By contrast, annual assistance to sub-Saharan Africa today averages about $28 per person—not

nearly enough to build a foundation for sustained growth and development.

However, it is not clear that the Commissioners grappled fully with the question

of at what speed the large increases proposed can be used effectively. (The proposal

is to increase aid flows by $25 billion annually between now and 2010, and then

assuming reasonable results, to add another $25 billion annually. This would eventually triple total annual aid inflows to sub-Saharan Africa from the current level

of about $25 billion from all sources. The emphasis on the need for recipient governments to be accountable if aid is to be effective is highly welcome and sensible. One

problem is that that emphasis is already heavily reflected in donor allocations

across countries within Africa. In the best-performing countries, aid, as a proportion

of GDP, is currently more than 20 percent of gross national income in Malawi, Mozambique, and Ethiopia, and more than 15 percent in Uganda, Tanzania, and Rwanda (in both cases, among others). It is about 12 percent of GNI in Ghana. In most

countries, aid finances virtually all new public investment. In the seven countries

in sub-Saharan Africa now eligible for assistance under the Millennium Challenge

Account (MCA), aid is currently between 6 percent (Lesotho) and 25 percent (Mozambique) of GNI, and is likely to increase further as they benefit from the MCA.

There are risks in rapid infusions of new aid. These risks include reducing the

receiving country’s ability to compete in export markets (if aid puts upward pressure

on exchange rates or induces people to leave productive private businesses to work

in government and aid-financed public programs), overwhelming fragile preventive

health efforts and road maintenance programs as attention shifts to new investments, and in the worst case, creating new pressures for corruption and patronage

as procurement and expenditure management break down. My concern is not with

the amount recommended in itself, but with the timing, with our limited understanding of the risks in the aid community, and with the resulting need for much

greater attention to minimizing and managing those risks.

In addition, the report does not make explicit the logic of different amounts of aid

for different countries, depending on country governance. Some countries have the

leadership and competence to use aid well; others have honest and reformist leadership but limited capacity; still others have leadership that is unwilling and in the

worst cases deeply corrupt. The Millennium Challenge Account, for example, promises ample aid to those countries most likely to use aid well. (The report does note

the logic of different types of aid for different countries, depending on their governance, making the point for example that countries performing well, in terms of governance and macroeconomic stability, should be able to benefit from direct donor

support for their own expenditures across the board (‘‘budget support’’)).

The regionalism challenge. The economy of all of sub-Saharan Africa, including

South Africa, is slightly smaller than the economy of Chicago. Imagine Chicago with

more than 40 ‘‘mayors’’ and Ministers of Education and public works, more than 40

tariff regimes and customs rules and barriers, and restrictions on movement of

workers from one neighborhood to another. The Commission puts welcome emphasis

on the role of such African organizations as NEPAD and the African Union—in defining regional priorities, in managing peacekeeping operations, and so on. In its

recommendations on trade, the Commission does not shy from pushing for reduction

of the tariff and other barriers which inhibit trade within Africa. It may not go far

enough, however, in emphasizing the potential benefits to Africa of developing regional and subregional centers of excellence—for agricultural research, university

23

1 Commission on Weak States and U.S. National Security, ‘‘On the Brink: Weak States and

U.S. National Security,’’ Washington, DC, Center for Global Development, 2004. Available at:

http://www.cgdev.org/weakstates. 2See also Jagdish Bhagwati, ‘‘A Chance to Lift the ‘Aid Curse,’ ’’ The Wall Street Journal,

March 22, 2005.

training, policy advice and review among peer governments—among other reasons

as a mechanism to encourage a return of the African diaspora to the continent and

discourage the ongoing hemorrhage of Africans’ most skilled and educated people to

the rich world. The report sets out the need for as much as $20 billion a year in

new infrastructure investments in the region, especially to encourage exploitation

of export potential; much of this new infrastructure investment will have to be done

across borders, and will require the kind of difficult coordination and negotiations

that among our U.S. States helped bring to fruition the U.S. Federal Highway System.

THE UNITED STATES CONTRIBUTION AT THE G–8 SUMMIT

Peace and security in Africa. The Commission emphasized the importance of peace

and security in Africa, and the critical need for donors to support the emerging African peace and security infrastructure, particularly by strengthening the African

Union (AU). However, the report does not directly address the broader challenge of

building state institutions in weak and fragile states (those states that have not yet

‘‘failed’’ but are at risk of doing so). On this broader challenge, the United States

could take several immediate steps, while urging its G–8 participants to follow suit.1

First, the administration and Congress should work together to fully support and

finance the new Office for Reconstruction and Stabilization within the State Department. This office is charged with coordinating U.S. efforts to address the threats

posed by weak and failing states, and seize quickly the windows of opportunity to

support their recovery and stabilization. Its creation stems from a forward-looking

2004 legislative initiative of Senators Lugar and Biden. I want to commend their

leadership in this important and heretofore neglected area.

Second, the United States could take increased leadership with its G–8 partners

in building up the African peace and security architecture of the AU and the respective regional and subregional entities that will, ultimately, be responsible for responding to, and hopefully preventing, the next Darfur, Rwanda, or Congo. As a

first step, the United States should maintain and increase its level of support for

the Global Peace Operations Initiative, a G–8 plan to train 75,000 peacekeepers, a

majority of them African, by the year 2010. I understand that Congress approved

just over $100 million for this program in fiscal year 2005, and that the administration has requested another $114 million for fiscal year 2006. These sums should be

seen as only a downpayment. I urge the administration to work with Congress to

increase support for this initiative, and to work with our G–8 partners to follow

through on their commitments as well, in a coordinated, coherent, and timely manner.

Malaria and AIDS vaccines. A good portion of aid to Africa—certainly on the

order of $5 billion a year—could best be spent outside Africa, where absorption constraints will not bind.2 How? Africa and other poor regions constitute poor markets,

and because of their poverty, private companies, including in the United States,

have little incentive to create the technologies that are relevant specifically to them.

African countries are poor because of limited technological opportunities (for rainfed agriculture in Africa’s soil conditions, for example), but in turn these opportunities are difficult to create because of the region’s low income. The research that led

to the Green Revolution in Asia was almost wholly publicly funded. It yielded

among the highest economic returns of any development investment.

In health, the problem is particularly acute, as lives are literally at stake. An estimated 90 percent of all research undertaken by rich country pharmaceutical firms

is on diseases prevalent in the rich world—that affect less than 10 percent of the

world’s population. Rich country governments can address this problem in a simple

yet powerful way. They can make a legally binding promise to reward the creation

of new technologies, be it via ‘‘prizes’’ or via agreements to purchase a fixed amount

of the resulting product or process. With such a promise, the rich world would guarantee a minimum financial return to research undertaken by private firms for the

benefit of developing countries.

The financial and legal outline of this kind of advance market mechanism, at an

estimated cost of $3 billion, has recently been developed for the case of a malaria

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3The proposal and its legal, financial, and budget implications are set out in Ruth Levine,

Michael Kremer, and Alice Albright, ‘‘Making Markets for Vaccines: Ideas to Action,’’ Washington, DC, Center for Global Development, 2005. Available at: http://www.cgdev.org/publications/vaccine/. 4See Nancy Birdsall and John Williamson, ‘‘Gold for Debt: What’s New and What Next?’’,

CGD Note, 2005. Available at: http://www.cgdev.org/docs/CGD%20NotelIMF%20Gold.pdf; and

Steve Radelet, ‘‘Grants or Loans? How Should the World Bank Distribute Funds to the World’s

Poorest Countries?’’, CGD Note, forthcoming. 5 Nancy Birdsall and John Williamson, ‘‘Delivering on Debt Relief,’’ Washington, DC, Center

for Global Development, 2002. Available at: http://www.cgdev.org/Publications/index.cfm?

PubID=42; see also Nancy Birdsall and Brian Deese, ‘‘Delivering on Debt Relief,’’ CGD Policy

Brief, 2002. Available at: http://www.cgdev.org/Publications/?PubID=31. 6William R. Cline, ‘‘Trading Up: Strengthening AGOA’s Development Potential,’’ CGD Policy

Brief, 2003. Available at: http://www.cdev.org/Publications/index.cfm?PubID=88.

vaccine.3 The United Kingdom has proposed creation of such a mechanism on a pilot

basis for the immediate guaranteed purchase of undersupplied immunizations, and

to create a similar advance market for an AIDS as well as a malaria vaccine. The

Bush administration could signal its support at the G–8 Summit for the United

Kingdom proposal by indicating its willingness to explore with Congress how to provide United States financial support for such a mechanism, and by urging that such

explorations be made in the other G–8 countries and reported on at next year’s summit.

Debt relief. The Commission on Africa recommends 100-percent debt relief for all

‘‘low-income countries’’ in Africa. My colleagues and I have elsewhere proposed that

countries with per capita income below $500 (many of which are in Africa) receive

100-percent debt relief, including from multilateral as well as bilateral debts), and

that they receive only grant transfers from the World Bank and the African Development Bank—until their income grows beyond $500.4 The United States could

bring this simple and straightforward proposal to the G–8 Summit. Agreement on

it would resolve the still prickly controversy between the United States and Europe

on use of IDA resources for grants, while reflecting the widespread congressional

and public support in the United States for debt relief programs. The United States

could also support highly limited sales of IMF gold to cover the IMF debt writedown, and could propose limited use of gold or contributions from donors to ensure

that the IMF could assist the poorest countries that have had debt relief to manage

weather, commodity price, and other shocks, over a limited time period.5

Strengthening AGOA and locking in aid to support trade adjustment and address

preference erosion. The Commission includes an excellent set of recommendations for

changes in the trade regimes of African countries themselves, to encourage more

trade within the region, and in the advanced economies. The United States will already be looked to for continued leadership on pushing forward the multilateral

Doha round. At the center, we have recommended that in addition: (1) The Congress

extend current AGOA preferences for at least a decade, and (2) eliminate the complicated and burdensome rules of origin treatment.6 AGOA has contributed to increases in apparel and other exports (and in jobs, for example from 10,000 to almost

40,000 in Kenya in apparel) from some African countries (though with recent worrying signs of a leveling off with the end of the quota protection under the Multi

Fibre Agreement). Its effectiveness, however, is limited since it is perceived as easily

revocable for any one country on the part of the United States, and because of its

complexity. (The proposed ‘‘Trade Act of 2005’’ introduced by Senators Baucus, Feinstein, Santorum, and Smith would address these points in part.) In addition, the

United States, as a longtime leader in trade liberalization and trade capacity-building and adjustment help, could propose at the G–8 Summit that simple guidelines

be developed, under the rubric of the WTO, for assistance to Africa tied to reduced

fiscal income as tariffs decline, and to temporary adjustment problems with job declines in sectors affected by preference erosion.

Aid to Africa: More multilateral; more evaluation of results; more emphasis on regional infrastructure and capacity building. At the G–8 Summit the United States

should emphasize the importance of improving the quality of aid to Africa. In addition to the ideas included in the Commission report, emphasis is needed in three

areas.

First, the G–8 should agree to maximize new donor contributions through multilateral channels, which are less subject to political and other sources of volatility

and less burdensome on recipient countries than the multiplicity of programs, rules,

protocols and negotiations implied by the many different bilateral programs, including those of the United States. Multilateral agencies include, of course, the World

Bank, and in the critical fight against AIDS in Africa, the Global Fund to Fight

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based aid, the United States should begin discussion with its G–8 partners on the

creation of a completely independent evaluation system for assessing and reporting

publicly on the effectiveness of aid-funded programs in Africa—funded by all

sources. Independent evaluation of aid programs has been a constant recommendation of various independent and congressionally mandated commissions over the last

decade. Becoming serious and systematic about such evaluation is particularly critical if the case is to be made for sustaining the increases in transfers to Africa that

the Commission envisions beyond the next several years. Third, the United States

should focus any additional aid to Africa on support for regional centers of excellence and for major investments in cross-border infrastructure since these are areas

where the United States has particular strength.

The CHAIRMAN. We thank you very much, Ms. Birdsall, we appreciate that comprehensive report, and likewise specific suggestions.

We’ll now have questions. We’ll have a 10-minute round, and

then after we’ve completed that, perhaps a second 10-minute

round. Let me begin the questioning by asking you, Senator Kassebaum Baker, from your experience as a person in government,

quite a part from your membership in this Commission, just consider for a moment most of the intervention by the administration.

I credit President Clinton and former First Lady, now Senator Hillary Clinton, for initiatives at the White House that led to a consideration that became AGOA. I also recall considerable debate we

had last year on its extension. I take Ms. Birdsall’s point seriously.

It should be extended for 10 years. Obviously, one reason for fighting for it last year was the uncertainty that faced all these new enterprises in Africa, but the Congress doesn’t often work in 10-year

periods of time. Uncertainty may be a factor in business. It is in

politics, too.

We have the AIDS situation, which President Bush’s administration pushed very, very hard, but there has been a difficult parliamentary struggle. First of all, you’ve got the idea, and then you

struggle to implement the moneys. Some would feel the promise of

the $15 billion, by $3 billion a year, hasn’t been received, although

we’re certainly moving in that direction. Likewise, there has been

some rivalry, although I think subdued, with the United Nations

activities in the same area. There have been problems trying to

come to grips with all of the constituencies that are interested in

African issues, quite apart from its priority of Africa, vis-a-vis other

things going on in the world.

Senator Kassebaum Baker, as you take a look at this, what reaction, if any, has the administration had to this report, thus far?

Maybe this is too early to raise that question. Maybe they’re still

studying it, trying to think it through. What can we anticipate in

the instructions that President Bush may give to the delegates as

they approach the G–8 meeting? What sort of support has there

been for the initiative of Prime Minister Blair or any of the points

that you have made today? In other words, what is the political

framework that faces us as we try to implement whatever comes

out of G–8?

Senator KASSEBAUM BAKER. Thank you, Mr. Chairman.

As you well know, it isn’t easy, and I think we’re all realists in

knowing that, as you say, the argument can come each year on

whether some things are going to be reauthorized or appropriated.

Regarding this report, I want to emphasis again, we were all independent of our governments. And some of us didn’t agree with all

26

aspects of the report, either. But it was a consensus that was put

together. As far as knowing what—I tend to believe in my conversations with some of the participants that will be representing

us and working with President Bush for the G–8, that they feel it’s

very important to lend support to Prime Minister Blair’s efforts on

Africa. President Bush feels the same way, as I mentioned, in

wanting to see success there in, I think, as far as specific things,

I’m not sure. Last year they addressed some initiatives at the Sea

Island meeting in Georgia. I think that on the whole those will be

reiterated, and support for those would continue. Other than that,

I hesitate to say.

The CHAIRMAN. So, the jury is still out in terms of the specifics.

Senator KASSEBAUM BAKER. Yes, I do think so, in terms of the

specifics, and I’m not sure that I would know what they were. I

would just add that I think, though, what is important is, what can

be helpful are hearings such as this, and a voice such as yours,

where one, we are laying out the many positive things that are

being done, is also to take a look at it as if you would, as maybe

Senator Martinez and Senator Feingold in the subcommittee structure, of what you might believe is some important message to come

from this. I mentioned that maybe it’s a good idea to pick a couple

out, to lend emphasis to, so that it enhances the debate. Now,

whether that reaches the level of the G–8 taking any action, I

doubt, but I think that just that could lend some support to a momentum for some direction, whether it’s in peace and security,

whether it’s better coordination. Of course, I can remember way

back when I was on the committee, I used to argue that for a long,

long time, and it never seems to take hold. Everybody talks about

it, but nobody wants to be in charge of coordination. And how we

get at that, I’m not sure, unless the point is reached that we recognize it is so crucial to the success of any effort. And that includes

the donor countries working together. It seems to me it improves

the effectiveness of what moneys go if we can make sure we are

not overlapping, that where there needs to be something addressed,

some one group can fill there, what the host country thinks, and

I’ve talked this over with some of the administration, and I think

everybody’s puzzling exactly what could be done. All I say is that

I know Prime Minister Blair hopes it will be at the top of the agenda, but we can easily be overtaken by events, and so one never

knows.

Not a very successful answer, Mr. Chairman.

The CHAIRMAN. Well, it’s very helpful. I raise it to you because

you have experience. You’ve been a fighter for these issues when

you were on this side of the table, as well today, and it is tough

going. One reason we’re having the hearing is because we’re applauding the work that the Commission has done. It’s an important

report before we get to the G–8. The administration or anybody

else may not pay that much attention, but, at least, we try to highlight it in our own ways. The subcommittee likewise will be following through, as will the full committee.

One way we will be working is an agenda I already had. I wanted to ask Mr. Thiam about this, and likewise, Ms. Birdsall. The

question is the forgiveness of debt, for example, the impact of the

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can countries, but to other countries as well. The committee has

been deeply in the weeds in this issue, examining not only the

World Bank, but likewise the other banks, for the very good reason

that there have been frequently inattentive or corrupt governments, or huge debts, so the people of these countries suffer twice.

First of all, they didn’t get the benefit of the loans and such

things, and second, they have all the subsequent debt. And then

third, we come and say, well, it’s time to wipe the slate clean again,

and we’re back to zero. This is probably inevitable, but we’re trying

now to ask even the World Bank, the most responsible of these,

under previous leadership, and now with Mr. Wolfowitz—what

about this? What kind of mechanisms are there for transparency,

recognizing sovereignty? This is a delicate issue in African states.

We’ve not talked a great deal today about our public diplomacy, but

how do African states take a look at the United States wading in

and looking down into the crevices of all of these loans? Some governments may say, ‘‘It’s none of your business, we’re dealing with

the World Bank, and they’ve loaned us money for a dam. Now

maybe the dam got built, and maybe it didn’t, maybe it flooded all

sorts of people’s farms and so forth, but that’s not your concern. It’s

our concern.’’ Have we taken charge? Can you give us any guidance

in this area? This is a relevant issue, I think, not only for the

G–8, but because of the ongoing situation there.

Mr. THIAM. Thank you, Mr. Chairman.

I think it’s an extremely important, sensitive, and complex issue.

I think that to understand it, you ought to distinguish country by

country, because it’s very hard to take a position that would be

valid for all countries. You ought to look at different categories of

countries. I believe some countries have reached a quality of governance that is such that one could give them the aid in a global

manner, letting them determine their own priorities. However,

today, only a relatively small number of countries in Africa are in

that position. I think we could draw a list of those countries. I

think there should be a reasonable consensus on who they are. I

think these countries should be allowed to go forward, and aid

should be mostly delivered to them as what we call budgetary support, which allows the government to spend freely on its own priorities.

I think the other kind of easy case is really the very, very poor

performers, where I think nobody would suggest any significant increase in aid because there is no capability there to put that aid

to a productive use. The really difficult are the third category, the

ones who are in the middle, neither very, very well governed, neither terribly governed. And I think part of the answer is what

Nancy Birdsall said, it’s really to diversify the channels by which

the aid is delivered to those countries, and try to go for private/

public partnerships and reach those populations directly. But in regard to Nancy’s concern about debt relief, I really believe debt relief should be total. I think the one case I knew, which was Coˆte

d’Ivoire when I was in government, 50 percent of the budget had

to go to debt service, so once you understand that in government

most of your expenditures are salaries, on the other half all you’re

doing is paying salaries, and you’re supposed to balance investment

with the rest, and the rest is 4 or 5 percent, so, and many, many

28

countries are in the same situation, so having any kind of meaningful development without a high level of debt forgiveness I think is

hard to imagine. Debt forgiveness shouldn’t mean that the door is

closed now on the future of those countries, and countries should

still be allowed to borrow more money.

Just one comment on that, that’s something that I really feel

strongly about, it’s about fiscal reform in most African countries.

What’s happening in many countries, independent governments

took over after the colonial administration when government revenue was primarily based on customs. And what that has done is

build a huge corruption machine. We all know how many custom

administration reform programs have been implemented all over

Africa, and most of them have failed. I think it is very important,

politically, that the burden rests on the citizens, and that progressively, African countries rebalance the way they raise government

revenue from this kind of very regressive, custom-based system to

a much more efficient taxation which could be low, but based on

the democratic economy, e.g. land tax. Then when the citizens realize that it is their money that the government is spending, they

will be much more encouraged to actually get involved politically,

and exert much more control on the leaders and hold them accountable. Actually, I think that issue of tax reform and fiscal reform in Africa is an important one.

The CHAIRMAN. I thank you for that response. I just comment

that this committee takes seriously the need to authorize money,

and to support appropriations for money. We’re likely to be more

credible as the multinational bank situation is cleared up, because

we have to authorize our contributions. We’re not the only country

contributing, but we are a major factor, and, therefore, we expect

at least some accountability. You’ve pointed out only a small number of the countries, but, at least, the responsibility of the money

being used well gives us some credibility with our constituents, so

that we may say in essence, the money is getting where it is intended. There is some responsibility and transparency, and so the

reforms, both on our side and on the African side, are important,

and that’s one of the things we wanted to illuminate in our hearing.

I want to recognize now, Senator Feingold, for his questions.

Senator FEINGOLD. Thank you, Mr. Chairman.

I’d like to first invite the Commissioners to comment on just

what they mean when they talk about good governance. How inclusive is this concept? Are we talking about accountability and transparency with regard to how donor dollars are spent? Or are we also

talking about genuinely democratic governance—tolerance of dissent, and respect for the rule of law? Where does respect for basic

human rights fit into the Commission’s vision of good governance,

and is there consensus within the Commission, within Africa, and

within the broader donor community about what this term ‘‘good

governance’’ really means?

Senator Kassebaum Baker.

Senator KASSEBAUM BAKER. Thank you, Senator Feingold. I was

actually going to say that Mr. Thiam might want to answer that

first. For myself, I regard good governance as being an independent

judiciary, and an independent parliament and a free press. I think

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that’s crucial. And I think, actually, if you’re from donor countries,

for instance, because you’ve got the means within a country to exercise a voice that would be effective in monitoring that.

But I would like to, perhaps, yield to my colleague who I think

has the experience in Coˆte d’Ivoire.

Mr. THIAM. Thank you, thank you Senator Feingold.

I would agree with that—I mean, an independent judiciary and

free press and an effective parliament is important. One issue, I

think, that is extremely important also is minority rights. In a

fragmented, very diverse environment, majority rule simply does

not work. The idea that if you have 50 percent plus one vote, you

get 100 percent of the power just cannot work, and that is something that I think many African constitutions haven’t handled very

effectively or very well.

I use an analogy with Europe to get the message across. Imagine

that you would have to elect the President of the European Union

on a one-man, one-vote basis. That would never work, because the

Portuguese will tell you, ‘‘Well, he’s been elected by a combination

of French, British, and German, and I don’t recognize myself in

this man.’’ Now you look at the heterogeneity that you have in

many African countries, it is very high. The one-man, one-vote system in many, many places just leads to very, very serious issues,

unless the rights of minorities are explicitly protected in the constitution. I really believe that encouraging African constitutions to

move in that direction will go a long way toward resolving current

issues.

Senator FEINGOLD. If the Commission’s recommendations were

implemented, as I understand it, African governments would receive a substantial increase in foreign assistance, that they would

have substantial flexibility to use. Does empowering the state to

this degree risk weakening the relative power of African civil society? And if a stronger civil society is the key to demand-driven

good governance, does this assistance actually, possibly risk undercutting some of the Commission’s core goals? What can and should

be done within the framework of the Commission’s recommendation, to ensure that aid helps to actually strengthen civil society?

Senator Kassebaum Baker.

Senator KASSEBAUM BAKER. I have some, perhaps, reserved

views on giving, who’s going to monitor and who’s going to give and

who’s going to receive the aid. I personally have some problems

just saying education money should go to the government. I personally believe it works better if it is a partnership of the government

with private fund foundations or NGOs or our own financing facilities like World Bank.

I think you need to be specific, if we’re indeed engaged in aid of

that sort. Large amounts of money, I think, aren’t productive, or

effectively used unless there is a goal and a network with which

it’s delivered. I don’t think it can be sustained if, indeed, you’re

looking at money that, say, would be going to Uganda, unless

you’ve got a working group there that includes the civil society,

that includes the others that work, but somebody who is in charge,

in the government, who has firmly been involved in working out

the plans to sustain it, whether it’s a health minister, for instance,

or someone like that. I think just giving it to the government to

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say, ‘‘This is for education,’’ and I’m making it sound too simple,

but in my mind that doesn’t work.

Senator FEINGOLD. Thank you, Senator. Mr. Thiam, do you want

to comment on that? Okay.

The Commission report emphasizes the importance of conflict

prevention, and of course, I wholeheartedly agree. What kind of increased spending on diplomatic presence might be necessary for the

United States to meaningfully implement this recommendation?

Senator, I know you and I have both had the experience, and I’m

sure the chairman has, of visiting seriously understaffed, sometimes seriously underfinanced U.S. diplomatic posts in Africa, I

think we need to be more serious about our presence in order to

engage in the kind of conflict prevention that could help avert crisis and keep things on track. Do you agree, and how should this

need be balanced with a call for more assistance resources?

Senator KASSEBAUM BAKER. Well, I do agree, I think now being

in Tokyo in the U.S. Embassy, I certainly value the work of the

Foreign Service, and I personally believe that the presence there

can be very valuable, if you have an active Embassy and Foreign

Service officers who are out in the community. I hate, because of

our fears, that we become more withdrawn because it’s absolutely

essential to know what’s going on, and to be engaged in the country

as a whole, and I really think Dr. Birdsall and Mr. Thiam would

agree with that, that you can’t know what’s going on if you’re not

out there and you can’t rely on just people coming to you and telling you, ‘‘This is what we think.’’ You get a sense of what’s going

on, and it’s very important to be engaged that way. It’s become

harder because of the dangers that have been posed, and we’re

never sure, but on the other hand, I think it’s important. As I say,

I wish we would look at some new initiatives, perhaps, that we

could be engaged in trying to get some control over the small arms

market. Africa’s flooded with small arms, and it’s a real concern to

Africans.

Senator FEINGOLD. Do you want to comment, Mr. Thiam?

Mr. THIAM. Just quickly, I believe it’s very important to increase

that presence, and we’ve given some numbers in the reports, and

figures on the costs of these crises in terms of lost lives and lost

production and aid, actually, that has to be mobilized to rebuilding,

and we’re talking billions of dollars in each case. Whereas, the kind

of preventative intervention we are talking about is much cheaper,

and objectively you’re talking putting tens of millions of dollars, or

even billions, and I think that’s money that could be very well

spent in intelligence, mediation, in prevention to head off these crises.

Senator FEINGOLD. Ms. Birdsall, did you want to comment?

Ms. BIRDSALL. Yes, if I may, on the specific issue, I would certainly endorse the idea that it’s relatively inexpensive compared to

other inputs to have as substantial presence as possible in our Embassies. I think, however, at the same time that the critical issue

for weak and fragile states in Africa, those who are emerging from

conflict, and those who are interagency approach to be more effective. We do not really have an overall coherent strategic view in

terms of how to deal with both rapid response to opportunities to

be helpful, when there’s an opening, when a new reformist governVerDate 11-MAY-2000 13:55 Dec 07, 2005 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6602 963492.SEN SFORELA1 PsN: SFORELA1
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ment comes in, and response when there are rising risks. And that

has to be a combination of more strength at the Embassy level, on

the ground, but more interaction of the NSC, USAID, Millennium

Challenge Corporation, the Pentagon, the Office of Reconstruction

and Stabilization at the State Department, et cetera, et cetera.

The center issued a report last year on weak and fragile states,

not only in Africa, and one of our major recommendations was

there be a rethinking of how the U.S. Government could be more

effective and more strategic in dealing with more than 50 states in

the world which are weak in some respect.

I wonder if I could just say a word, going back to Senator Lugar’s

question about the debt, and make two comments. The first is that,

as you all know, there has been a long and fractious, and in some

respects silly, debate between the United States and the Europeans

over the issue of debt and grant for the future. I think Senator

Lugar called it ‘‘inside baseball.’’ There is an opportunity now to

rise above that, there’s tremendous overall consensus, frankly,

about the fundamental issue. There’s tremendous support on all

sides in the United States and in Europe, so this is an area where

it is possible for the administration at the G–8 Summit to push our

partners to some sort of a real deal, a conclusion that’s visible and

which countries, which are eligible, have already been deemed eligible for the HIPC program of the World Bank and the IMF. They

have already been pronounced as having reasonably good governance and good economic management. Those countries, if they are

also very poor, and have a lot of multilateral debt, it just will wipe

the slate clean to write off that debt, finally, completely. And their

Ministers of Finance will then have an incentive both to increase

revenue collection from reasonable taxes, and to have control over

the use of those revenues to set their own priorities. Now they have

the problem that the taxes they collect go for debt service, and

what they get in return is not revenue that is easily allocated, they

get hundreds of different projects, hundreds of different missions

from the World Bank, from the United States and from U.N. agencies. So, if they are clearly having good management, then we

can—they and we can see a kind of accountability in their use of

their own revenue, once their debt has been eliminated. I think in

this respect, the remarks of the Senators, both—all of you—on the

question of whether it’s working, the United States could also take

leadership in defining some kind of independent approach to evaluation of these different donor efforts, including debt relief, so that

we can tell the taxpayers in the United States and elsewhere, what

has worked and what hasn’t worked. But to do that requires real

leadership, because we don’t have that kind of independent entity

at the moment.

The CHAIRMAN. Thank you very much, Senator Feingold. The

Chair recognizes Senator Obama. Let me just mention that Senator

Martinez has briefly left us for a vote in the Energy Committee

markup. He apologizes for missing this particular round, but it’s a

pleasure to have Senator Obama on hand.

Senator OBAMA. Thank you very much, Mr. Chairman, I apologize for being tardy, but I had a chance to read everybody’s statements. This is an especially welcome opportunity for me, not only

32

because, obviously, my father was from Africa, but my mom was

from Kansas, so it’s a great combination.

Senator KASSEBAUM BAKER. It’s a great combination. [Laughter.]

Senator OBAMA. I’ve been an admirer for many years, so I appreciate the opportunity to speak with you.

Let me preface my remarks just by indicating how impressed I

am by the work of the Commission, as well as the willingness of

the Blair government to spend its political capital on this, I think

it’s absolutely critical, and all of you are to be commended.

And I’m pleased that there is a recognition that what is happening in Africa is unique, in some respects. You take a look at a

country, like my father’s country, Kenya. In 1961 when I was born,

the levels of development in Kenya were probably on par with

South Korea, maybe even slightly ahead of South Korea. Obviously

that’s not something that could be said today, and this indicates

lost decades of opportunity for men and women and children on the

continent.

It’s also important to note that when we’re talking about issues

like HIV/AIDS or crushing poverty, those aren’t restricted to Africa. To the extent that our overall United States foreign policy

thinks in terms of how we’re going to be addressing some of these

long-term global challenges, I think Africa inevitably is helped. At

the same time it’s appropriate for us to focus, in particular, on Africa because if we can figure out things that work there, then some

of those lessons can be taken to other countries.

A couple of areas that I just wanted to explore with you that

have already been touched on. The issue of security—I’m wondering, and I don’t know which one of you wants to address this—

whether there are particular recommendations or structures,

whether that’s the African Union, involvement with NATO, particular approaches that the Commission thinks are appropriate in

thinking about security and regional conflict in Africa. And the reason I say this, it’s already been noted in the Commission report

and some of the statements that have been made earlier—we can

not foster any meaningful development as we’re seeing in portions

of Iraq right now, in the absence of basic security. And this is obviously a delicate topic, because the question of whether international security forces are involved in a country’s internal conflicts, particularly when it’s a Western country, coming into an African country is always sensitive, but I just don’t see how we end

up moving aggressively on these goals without slipping backward,

if we don’t have some basic security infrastructure in place. So, I’m

wondering, Mr. Thiam, if maybe that’s something you want to address or are there other mechanisms that you think need to be a

part of this process?

Mr. THIAM. Thank you, Senator. With your permission I’ll address the question, and if Senator Kassebaum Baker would like to

comment, too, because we together worked on that specific issue as

Commissioners, peace and security. If you’ll allow me, maybe, I will

tell you why I decided to work on this issue in the Commission. It’s

because, in December 1999, I got a very nice letter from the World

Economic Forum telling me we’re nominating a dream cabinet

every year, and you are one of the 12 Ministers in the world nominated, and you should come to get your award in January 2000. I

33

never made it, because there was a military coup in between, so

that’s just made me more sensitive.

Senator OBAMA. It underscored the fact that you needed to address these problems.

Mr. THIAM. So, that was relatively unique, more seriously, I

think what we’re saying is really that we have to work with the

African Union, and also recognize that it is a less than perfect organization today, but it’s a reflection of some of the weaknesses

that we’ve been commenting on regarding African states, but it is

the only organization we have. It is the closest to the issues, and

I think it’s the best able to intervene, so the capability of the AU

to intervene when the fighting starts and there is a violent conflict

underway, I think, is critical. What went on before is interesting,

there have been a lot of assessments of what the AU has been

doing, but I think there is certainly a recognition now in the AU

that we need it to move from the noninterference principle, to a

nonindifference principle, and on Africa-initiated, Africa-supported

need for intervention, and I think we need to strengthen its capabilities, logistically providing transport and all kinds of support so

that interventions are more effective.

The other way we can make progress is on the arms trade. I

don’t believe that there is one machine gun produced or manufactured in Africa, so this is a big, big, big issue around the arms

trade, and the trade around small arms. And there’s one specific

area there which is the brokerage—sorry, it’s my English, I’m

French-speaking originally.

Senator OBAMA. No, no, no. I promise you, your English is better

than my French.

Mr. THIAM. I believe the United States has a very strict legislation in that respect, to control the brokerage of arms, but that is

not the case on the international level, and there is a clear gap

there that needs to be filled. So, we’ve recommended an arms trade

treaty, and we think that can be a very effective way to deal with

that. And there is also a whole series of measures around conflict

goods. People can sell their natural resources and use the revenues

to finance a rebellion or a conflict somewhere, all that—I work for

an insurance company—all that can be controlled today very effectively by the international financial system, so I think there is

much the United States can do to make life more difficult for people who want to start an armed conflict anywhere in Africa. Today

you can start a civil war anywhere in Africa for $5 or $10 million.

Senator OBAMA. I would be very interested to hear your recommendations on this subject.

I’m wondering about something that, Senator, you may want to

touch on this as well. Is your assessment, based on your interactions with some of the countries that are participating in the African Union, that there’s sufficient commitment from the member

states to welcome significant investment in the African Union,

along with coordination with NATO, for example, on training, or

other strategies? Are we at a point in time where the organization

is solid and stable and the members are invested enough that we

should be making a larger investment?

Senator KASSEBAUM BAKER. Well, sometimes, as you know Senator Obama, you have to take risks, and I think this is one that

34

we have to take. It seems to me it holds the potential, I would say

it has support of the African nations, I think that’s not in question.

There is some, probably, tension between NEPAD, which of course,

is part of the African Union, but I think it still has to show that

there’s a strength, I think they’ve come together recently in Darfur,

although limited, I think, it shows that they were standing up and

taking some necessary steps forward, and I happen to believe it is

going to work, and I think we need to give it the support, because

I don’t see anything else there that holds quite the same opportunity in the way that it does.

Senator OBAMA. I have a couple of other questions. My mother

actually did a lot of international work focused on women. I understand that a measure of how well we do with respect to development strategies is how well we’re educating women, increasing

their literacy, and allowing them to enter into the commercial

sphere. I’m wondering if that was something that was noted by the

Commission?

Senator KASSEBAUM BAKER. It is, and I will just say that all

three of us addressed that and feel strongly. I, myself, would like

to see more radio utilized by women, in programs that could talk

about health care, and education, and you mentioned, education as

such is an inexpensive way to talk about how to take care of children, and nutrition education, but a women’s radio network that

can reach a lot of people, because their interests are rooted in community and family, and really in many countries, they’re mainly

engaged in agriculture.

Senator OBAMA. Right, that’s an interesting point.

Senator KASSEBAUM BAKER. I think it is something that I believe

has real potential to, with little money, encourage the voices of

women to be a part of the process.

Senator OBAMA. Mr. Chairman, I know my time is up, are we

going to have a second round?

The CHAIRMAN. Yes.

Senator OBAMA. I’ll follow up on some questions then.

The CHAIRMAN. Thank you very much, Senator Obama.

Let me return to something that was touched upon, but not explored in our earlier questions, and that is a point that you outlined, Ms. Birdsall, about the vaccines. You pointed out, correctly,

that many American pharmaceutical companies that deal with

these endemic diseases are not really sure where the market is.

How will they get paid for all of the inoculations and shots and

whatever is required? And, so on the one hand, the world looks at

this and says, this is not the way life is supposed to be. If there

are life-saving devices, surely somebody ought to be willing to come

to the rescue. But on the other hand private firms have said, ‘‘Well,

not necessarily us.’’

Now, you’ve outlined an idea here which I think is an important

one, and hopefully will be a part of the discussion at the G–8, and

that is, is there some sort of advanced package, or some promise

at the end of the rainbow? If you do the research and you have millions, tens of millions of orders for this, to save lives in Africa and

elsewhere, there is some value in doing the years of research, including maybe tens of millions of dollars or more that’s required to

do this. For the moment, organizations like the Gates Foundation

35

have entered into this, mercifully, and this is one of the remarkable

things about our world—that private wealth has created these

large entities that are nongovernmental, that can go wherever

needs may be found. One thing we’ve tried to do in this committee

is to applaud, specifically, the Gates Foundation and their work,

and even to think now about some type of antidote for HIV/AIDS,

which has sort of been beyond the pale thus far of successful research. It will take a lot of money, and they’re providing a lot of

money.

As you have outlined this idea, is there any receptivity, given the

fact that there’s going to be an international meeting that involves

the United States, but also involves other large organizations on an

international basis? What if the G–8 countries said, ‘‘Well, we’re

willing to accept our part of this situation’’? How do you form an

organization to handle the amounts of money that are required to

provide this fund that induces the tens of millions of research on

the part of somebody? How do you assign who does the research?

Do you wait for volunteers? I’m just eager to hear. You must have

given some thought to this, or somebody has. It is a tremendously

important idea. Otherwise we’re going to be back to the Gates

Foundation, and they will probably get somewhere at some point,

and then the question will be, who pays for all the serum, or those

who administer, and so forth? Can you enlighten us any more?

Ms. BIRDSALL. Right, I’d be delighted to say a little bit more, and

let me encourage, if not yourself, then your staff, to look at the report that I referred to, which is footnoted in my testimony, because

it does a better job than I could do, frankly.

But the idea is fundamentally that a number of sponsors—and

sponsors could include the Gates Foundation, which by the way,

helped finance much of this work I’m referring to—sponsors would

be governments, foundations and could be international organizations like the World Bank that might have some financing available. So sponsors would enter into contracts with willing pharmaceutical firms from anywhere in the world. So you don’t really need

an entity, luckily, you need a legal arrangement that pulls the

money together, or the promises with those pharmaceutical firms

willing to enter into it. And in the case of the malaria vaccine,

which we outline in that report, essentially those pharmaceutical

firms would be guaranteed a purchase of an acceptable vaccine,

which countries would actually have to buy, demand, but the purchase price would be guaranteed to them. For example, for every immunized person, $15.00. And that guaranteed price would last for a specific number of purchases, so there

would be approximately $3 billion out there from the sponsors to

go to one or more firms which might develop a vaccine, and then

perhaps, a second firm, a better vaccine. Then, part of their legal

agreement would be that once 200 million doses in this example

had been bought, they would reduce the price, indefinitely, going

forward, and promise production, indefinitely going forward, at $1

per immunized person. So, just as you outlined, the concept is to

create a market where a market doesn’t exist.

The CHAIRMAN. Well, it’s an extraordinary idea, and I really appreciate you bringing it to our attention, as well as the report

you’ve cited. It’s an idea that has not received a great deal of pubVerDate 11-MAY-2000 13:55 Dec 07, 2005 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6602 963492.SEN SFORELA1 PsN: SFORELA1
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licity, and yet is monumental. And as we’re discussing what has to

happen in Africa, we’ve all focused on the security to begin with.

There have to be stable states, and that will take some doing. It

really comes down to this public health situation in which, as we

have heard in testimony from our ambassadorial nominees, you

must deal with malaria and with HIV/AIDS. Well, usually they’re

prepped for that, they’ve done their homework. But, when somebody demonstrates that a huge percentage of the population of

many African states is already infected, as well as the whole group

of affected people that are parents, as opposed to children or grandparents, or teachers and productive individuals. There are some

states, even as we talk about this, that are being decimated.

Ms. BIRDSALL. I didn’t answer your question about the receptivity to it, and I would like to mention that there has been just

in the past 3 or 4 months a lot of discussion of both this long-term

malaria/AIDS vaccine effort, but also of a pilot that the United

Kingdom is anxious to start, which would be not for the R&D for

a new vaccine, but would be for a guaranteed purchase contracts

for existing drugs and immunization products, which are not being

produced in adequate supply. And the idea there is to bring down

the price by guaranteeing the purchases to firms going forward so

you can get a better deal, in effect. So, one approach for the United

States at Gleneagles would be to agree to some form of this pilot

scheme for existing immunization products, and to ask the partners

in the G–8 to study carefully a more ambitious idea and come back

the following year with their, hopefully, commitments to actually

moving forward.

The CHAIRMAN. Mr. Thiam, do you have a comment about the Africa priority at the G–8? When I was visiting over in the United

Kingdom last summer, already then the British Government anticipated for the G–8, the whole Africa emphasis. It came some time

back, which, of course, gave you an opportunity on this Commission

to study this. Now Tony Blair is back after the election, he is still

the Prime Minister, but it’s been suggested that all sorts of things

may happen prior to the G–8 meeting.

To what extent in your judgment, visiting with the Prime Minister or others, is this emphasis on his part such a paramount consideration that he is determined to try to get his colleagues, maybe

our President and others, to say that this is a topic on which we

can leave the G–8 at Gleneagles without a formula? In other words,

are we really going to press to a conclusion, do you believe, in this

situation?

Mr. THIAM. I really believe so. There is every indication in the

talks, and just the fact that we’re here today discussing this issue,

I think is very, very important and very positive. One thing the

Commissioners strongly believe in is the role of public opinion and

the public in the developed countries in these debates to, and there

is a very significant opportunity—through NGOs and various organizations to really reach out to as many people as possible, and

talk and explain and communicate. I always say, it’s not enough to

describe the tragedies, because I think everybody’s aware of that,

there is a history of images of famine and war and hunger and disease, but it is more important to convince that something can be

37

done. I think that’s where the battle should be fought, to really

convince that this is a tragedy, but it’s actually preventable.

Nancy was talking about the children dying of dehydration, advocate, and I think for many countries there’s a very large public

opinion movement leading to Gleneagles, but we don’t know what

may happen between now and then that will determine, I think, as

Commissioners continue pushing the direction and we’re very

happy to receive your support in doing that.

The CHAIRMAN. You’ll be doing your part, and hopefully we’ll do

ours too, by providing feedback.

Senator Feingold.

Senator FEINGOLD. Mr. Chairman, I have a couple of more questions for the Commissioners, and then one for Ms. Birdsall.

As Commissioners, you know a demographic analysis of sub-Saharan Africa shows that the region’s massive youth bulge continues

to grow, as African populations become increasing dominated by

large youth populations, states face tough questions about whether

African economies will be able to generate jobs for these youths,

and about whether African realities will be able to meet the raised

expectations of urbanized populations with access to the same

media messages that our own children see.

How do the Commission’s recommended strategies emphasize the

importance of focusing on youth, and how prominent were youth

actually in your consultation process?

Senator KASSEBAUM BAKER. To be perfectly honest, I don’t, as

recognition of demographic change, but I don’t know that we focused that much on youth, as such, other than education and, I

think, a role in the economic outlook for the future. I personally

think it’s terribly important that young people are educated to

know there is a job out there. It seems to me in a many young people want to go into international affairs, or the government, and

there are only so many government jobs. We’re not helping that

much, I think, to train them into skills and jobs, and therefore

they’re not there. That’s why, I think for me the important thing

is to have them understand there is a light at the end of the tunnel, to use that old expression, because in these fragile societies,

I would just urge that the committee not forget idly the work that

needs to be done in a fragile society as well. Because otherwise,

take a look at the DRC. If it falls apart again, we have turmoil in

that region again, and it is a very fragile balance, because young

people have nowhere to go. There are no jobs, and they are dragged

off to serve in these armies, 13- and 14-year-old boys, and I’ve seen

them, and you have too. And there is nothing out there. And that’s

why I feel so strongly about trying to find means of building something in order to develop these skills, and I like the center of excellence in training in the regions, and it’s also like our old Voc-Tech

programs, training in skills that can be taken into work in the community. I think it’s very important, not only in Africa, but the demographic change in other areas—Latin America is one, and in the

Pacific region, Southeast Asia where the societies are young, and

the jobs for so many are just lacking, and I think it’s one of the

big issues we face, and it’s long term and it really should begin

now.

The CHAIRMAN. Mr. Thiam.

38

Mr. THIAM. If I may just respond to that, I think it is the number

one issue in Africa, absolutely. When I was a child, the population

of my country was 4 million, it is now 16 million. Many African

countries have gone through similar experience, their population

quadrupling over 30 years, a nation multiplied by four. There is no

amount of economic growth that can allow you to accommodate

that, going back to my experience of the soldier who arrested me.

I looked at him and I said, ‘‘How old are you?’’ And he told me he

was born in 1982; he was 17. It’s really absolutely vital that we’re

able to create those jobs, and the answer to that is private investment in the private sector. I take a company like mine; we’ve created 4,000 jobs in India in 2 years, and Africa needs to get its

share of these jobs. It sounds illusory when you talk about conflict

and civil war, but I mean, it’s all the more pressing to deal with

both these issues, and to stop that, and to bring that situation to

an end so that quality investment can take place because all of my

experience with companies shows me that providing the right environment—companies will invest—there’s a lot of money out there

that is ready to go in, provided the conditions are right, but time

is of the essence because today, money is going elsewhere, and the

gap between Africa and the rest of the world is only increasing. So,

we must absolutely address this issue.

Senator FEINGOLD. The Commission also emphasized the importance of a coordinated multilateral effort to help realize Africa’s

vast potential, and in some ways the report seems to assume, I

think, more unanimity and motive and perspective than may actually exist. China is, I noticed, in my trips to Africa, a tremendously

important actor in Africa. But China’s view of investing is Sudanese oil resources right now, and the United States view of governance and human rights issues are quite different. Donors will make

different calculations about whose interests in African states and

African populations should be paramount in policy making.

In light of these realities, do you think that the kind of coordinated, unified effort you proposed can actually succeed?

Senator KASSEBAUM BAKER. I’ll leave that to Mr. Thiam.

Mr. THIAM. Thank you. Yes, I think it can. I think Africans, and

African leaders, have historic responsibility, of course, it will not

succeed unless we have the quality of leadership that can make it

succeed, so the first answer has to be either what kind of leadership are we able to produce in Africa, and then I think if we have

that, then I think it can happen and we can succeed.

Senator FEINGOLD. You mean leadership of an African country.

Mr. THIAM. Yes.

Senator FEINGOLD. A leader who is capable of handling what

might be differentiating the motives of the United States versus

China in terms of their objectives in Africa.

Mr. THIAM. Do what a leader is supposed to do, which is to really

further the interests of his people without creating any major damage to anybody else, and the ability to discern what is the longterm interest of the country is crucial and there’s no substitute for

it.

Senator FEINGOLD. Let me ask one more question, Ms. Birdsall.

I’m often struck by how frequently I hear reference to the Millennium Development Goals when I’m abroad, little we discuss these

39

goals here. Will you comment on the administration’s support for

the Millennium Development Goals and explain what progress the

United States has made in achieving our commitments on these

goals? Are we on track with regard to our own efforts to meet the

Millennium targets for 2015? What does this tell us about the will

that exists here to engage in the kind of energized, robust development effort outlined in the Commission report?

Ms. BIRDSALL. That’s a very tough question. You know, what is

notable, you’re right, is that in the United States there has not

been the attention to the words Millennium Development Goals,

and I think that’s because of the greater concern in the United

States about the implications for the size of aid budgets, the Millennium Development Goals are seen, maybe too much, in the administration, and perhaps in Congress as about money, and there’s

an allergy—perhaps a healthy one—to either the executive branch,

or the legislative branch making any commitments about money, so

the words are not popular politically, that’s true. And this is unfortunate, I think it might be time for our government to carve out

some position that is about the Millennium Development Goals in

their entirety, because the goals essentially reflect the concept of

a partnership of mutual responsibility, a compact between the rich

world and the poor world, which is exactly the approach taken in

the Africa Commission Report.

On actual progress in the United States, I’d like to call your attention to an annual effort at my center which ranks the rich countries in their commitment to development, defined across the

warming and its problems—which Tony Blair is also concerned

about and will raise, I’m sure, in Gleneagles—security issues, technology development and friendliness, trade of course, migration,

and I’ve missed one. In any event, it looks across the board at

seven components of U.S., and other countries’ approaches to the

development challenge, and the United States ranks, in the last

year’s ranking, in the middle, or maybe a little higher, something

like 7th out of 20 or 21. Essentially because, although United

States trade policy in many ways is not great, it’s better than that

in Europe and Japan in terms of our open borders, same with migration. We rank very poorly in terms of our aid effort as a proportion of our overall economic wealth. I would say we also ranked

somewhat middling in terms of our aid effort on the quality side.

The U.S. programs are seen as part of the problem of fragmentation and lack of coordination across the donors imposing high costs

on recipient countries, instead of being part of the solution.

The CHAIRMAN. Thank you very much, Senator Feingold.

Senator Obama.

Senator OBAMA. Thank you, Mr. Chairman. Let me pick up on

something that was mentioned earlier, and that is the issue of regional cooperation. And I thought you had, Ms. Birdsall, a wonderful reminder that if you combine economies of the continent, they

are slightly smaller than the city of Chicago, which says something.

Now, Chicago and Illinois are famous for having too many governments, by the way of mayors and townships and all kinds of stuff.

With respect to Africa, if we concentrate resources in ways that

give us economies of scale, I’m wondering—and any of the three of

you, I’d be interested in your opinions—as the Commission was

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doing its work, was there some sense, strategically, that we should

focus our resources on some key regional powers? What is happening with those powers as anchors to overall development strategies? I’m thinking that if Nigeria had its act together and South

Africa is the lynchpin of the southernmost portion of the continent,

and whether it’s Kenya, Uganda, a couple of the stronger countries

on the east, that creating some spaces in which transparency and

economic growth are taking place, would affect other parts of the

region. I’m wondering, is that something—that’s something that

has been discussed, talked about; does that make sense?

Ms. BIRDSALL. Do you want me to say something about that? I

think it’s a critical question. We do know that some of the conflicts

in some parts of Africa are exacerbated because of what’s called the

‘‘net neighborhood effect,’’ and that could be offset if there were

these anchors.

Let me say a word, in particular, about Nigeria, because South

Africa is already quite an effective anchor, including for a regional,

a subregional group in the southern part of the continent that is

working reasonably well. But on Nigeria, I think it’s an interesting

example of the potential for the United States to take some leadership. Nigeria has now had for several years, under the second

Obasanjo regime, a reforming cabinet. In particular, the Minister

of Finance and the head of the Central Bank, are both working

very hard with very effective teams to deal with corruption problems. The Nigerian Government, in the last year, has saved a substantial portion of the windfall it has received because of the high

oil price, and there is a problem of debt in Nigeria which is creating an internal political problem in which the Parliament is resisting some of the reforms because of its agitation over the long

history of the way debt was accumulated in Nigeria. Nigeria actually only borrowed about $3 or $4 billion during its early democratic government in the eighties, but the military government subsequently didn’t pay, and as a result, the interest on that debt, and

$3 or $4 billion has now accumulated to almost $30 billion because

of arrears and penalties, and this debt is owed mostly to Europe—

France, Germany, the United Kingdom, a little bit still to the

United States and Japan, so there’s a lot of——

Senator OBAMA. So were they operating this on a credit card?

That sounds familiar——

Ms. BIRDSALL. They weren’t borrowing more, they just stopped

paying back, so the cost of that debt ballooned because of interest

and penalties, as some of us might know, if you don’t pay your

credit cards, right, they were having a credit card problem. So

here’s a case where the United States, including possibly at

Gleneagles, could signal that it would support a risky, it would be

risky, as Senator Kassebaum referred in an earlier comment to the

logic of taking risks when there are opportunities. We could take

leadership on the Europeans, in particular, moving ahead and saying, okay, we will write off this debt, in fact, the Nigerians could

offer to use some of the debt at a reduced rate, and there is discussion of that going on between the Nigerians and some of the debtors.

So this is one where—in our security interest—as well as in

terms of improving management in Nigeria, exploiting an opporVerDate 11-MAY-2000 13:55 Dec 07, 2005 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6602 963492.SEN SFORELA1 PsN: SFORELA1
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tunity to create an anchor, and by the way, of course, Obasanjo has

shown great responsibility already in terms of the situation in Sierra Leone and Togo elsewhere on helping out when there are

neighborhood conflicts. Here’s an opportunity for the OECD countries, the advanced countries, with some risk, admittedly, because

this—but to shore up a reforming government, and to ensure that,

at least in the next election, the efforts of Obasanjo’s government

to undertake economic and political and social reforms are not undermined because the popular vote goes against their inability to

have dealt with the debt.

Senator OBAMA. Senator.

Senator KASSEBAUM BAKER. No, it was another subject, thank

you.

Mr. THIAM. I would just like to build on that, because I strongly

support what Nancy Birdsall has just said, but I think it’s not an

either/or. You do have to support the Nigerias, the South Africas

and to help regional powerhouses. But I think it’s like a chain. You

are as weak as your weakest link, and you, as I say, the point is

often made that we share the same geographic space, so if a teacher in the classroom says, ‘‘Well, I’m only going to focus on my good

pupils,’’ the point is, there is a contagious disease in the classroom,

it’s going to spread, and kill all the good pupils. So ultimately, you

must take care of all the pupils and not just focus on the best ones.

Senator OBAMA. Absolutely, I guess the question has to do with

some of the debates we had when we were discussing the President’s Millennium Challenge Accounts. That is, there are going to

be some states, that, because of a variety of reasons are able to

take on more, and we want to invest more in those states. Then

there are others in which moving away from traditional aid programs that provide for basic public health that those may be the

most important things that we can do in certain other countries,

and I’m just wondering whether internally within the Commission

you envision prioritizing and thinking about capacity within these

discrete countries. There may be some benefit to making sizable investments or taking bigger risks with certain countries than others.

Mr. THIAM. I agree with that. I think we haven’t published a

prioritized list of countries, but we certainly support the approach

and have an idea of which countries should come first.

Senator OBAMA. Senator, was there a comment that you just

wanted to pick up on?

Senator KASSEBAUM BAKER. Before we closed, I wanted to go

back to the question, perhaps, that Senator Feingold raised about

whether, with the Commission, and the Commissioners, could we

bring people together? I would just like to say that I do believe, and

it was recognized by the Commissioners that while we might have

separate ways of dealing with some of the issues, clearly the issues

that were laid out were ones of which we all knew were problems

for the continent of Africa. And I think the term ‘‘compact’’ is a useful one in the sense that these were concerns that all donors, all

major donors in the G–8 share, but there was also an acknowledgement that there would be different ways that we might move toward helping achieve that. I think the three of us have addressed

here the fact that the greater coordination we can achieve, even

with our different paths, knowing what we’re doing and how we

42

can make them work effectively within a country address is something that would be a major achievement, I think, to success in seeing fruition in reaching the success of the compact.

Senator OBAMA. Mr. Chairman, I know we’re running out of

time, I’m going to have to leave, I don’t know if you’re planning an

additional round. If you don’t mind, maybe——

The CHAIRMAN. Go ahead, Senator, because we will probably not

have another round, the votes, now I’m advised, will commence

about noon.

Senator OBAMA. Okay.

The CHAIRMAN. And then we’ll be locked into that situation.

Senator OBAMA. I hope the chairman finds this a useful question.

My final question is: What specific steps do you think the United

States and this committee can be taking to advance these goals?

We have an administration that, I think, is sincere in wanting to

pursue development in Africa, but seems to be allergic to multilateral efforts. You don’t need to editorialize on that, but I will—they

have their Millennium Challenge Accounts and a particular way

that they want to move, and I don’t think their goals are contrary

to what’s in the Commission, but my sense is they seem to be

steering the United States onto a particular policy path.

What do you think would be the two or three most important

steps that the United States could take, and maybe, Senator, you

could particularly address the role that this committee, having

served on it, could take in encouraging the sort of collaboration and

coordination that you just discussed?

Senator KASSEBAUM BAKER. Well, thank you, that is an important question, and I know the chairman, as he said, was a real

leader on African issues when I was the subcommittee chair and

ranking member, I had both roles to play, but, and so it has had

a history in this committee I think, of an interest in Africa on both

sides of the aisle. I share a desire to see us be more collaborative,

I think it’s important for us when we’re trying to meet some large

efforts that we bring to bear our expertise in the arena with others,

so what is done has greater rewards at the end of the day because

it has been working in collaboration and conjunction with others.

I think Nancy Birdsall made an excellent example of how many

different agencies are all there on the ground, and again a lack,

and I think the question is, how do you bring about that coordination? Whose responsibility is it? And within one’s own country, and

government, as well as among.

I guess I don’t know whether this is a role the committee wants

to undertake to look at that, and how you further it, I suggested

in my remarks that we focus on a couple of things, and we would

each have, I suppose, our own priorities, but mine would be working with infrastructure and that was a recommendation that was

in the Commission that a public/private partnership be formed in

a separate type of trust fund initiative for infrastructure. And this

is infrastructure that I think would cross regions, so again, you’re

pulling other countries together so you can enhance your transportation, but I’m sure others would point to other areas, and security

issues, and that is one that I think, actually, we are doing in good

collaboration with other countries.

43

I think for this committee if there is the interest that just taking

a couple of the issues that are in the report, and maybe the

buyback initiatives, or how one gets a handle on recommending

what to do about small arms in Africa. Those kinds of things,

maybe, are conducive, and I would suggest education. A lot of

money and interest is involved in education now, is it being coordinated as effectively as it could be to help? So, I think there are all

kinds of things that the committee could do, and I know, Mr.

Chairman, I’m very appreciative, I think all three of us are, for this

chance to sort of explore these issues before the committee. This

gives us a chance to have a good hearing on the report, and I think

these kinds of things help keep the issues alive, because there are

so many issues we face today, that I think for most people it’s awfully hard to focus on the further distance. We see Darfur and we

think, ‘‘Well, we’ve been through this before, we’ve seen these pictures on TV before.’’ And there’s a certain sense of, what can we

do to help? And I think that’s what would be very positive, is if at

the G–8 all the countries would say we can do something positive,

it may not be meeting the Millennium Challenge Goals, but what’s

important is, showing that something is done in a concrete way

that’s positive, that provides an incentive for others, then, to move

forward. And by others, I mean African governments themselves.

That’s my own personal view. But I think it reflects, pretty much

what the Commissioners felt, even though, knowing that our own

governments might be taking some different actions that ultimately the goals were the same, in the areas that were addressed

in the report.

The CHAIRMAN. Thank you very much, Senator Kassebaum. I

want to recognize now Senator Martinez, who has returned from

his duties elsewhere, as we mentioned. We’re delighted you’re back.

Senator MARTINEZ. Thank you very much, sir, and I know Senator Kassebaum Baker understands the many demands on our day

as we run from one hallway to another. I’m still trying to find my

way, which makes it increasingly challenging to try to do that, but

anyway, I have a number of questions, and I am sure that some

of these may have been covered, so please forgive me, but I thought

I would just try to go at them, and if it’s repetitious, please advise,

but I wanted to ask Mr. Thiam how the report has been received

in Africa, both at the governmental level, and in civil society, and

in general, if you have any observations you might share with me

on that.

Mr. THIAM. I think, although the report has been well-received

because the strength of the African representation of the Commission was important to Africans, out of eight Commissioners and

coming from a variety of countries. So it was significant amount of

time in consultations in West Africa, Central Africa, which involved

civil society and which were actually quite productive. I do think

that there is a lot of skepticism. I think people would say, ‘‘Well,

the report makes sense, you’re dealing with real issues,’’ and so on.

Some people even say, ‘‘Okay, it is hard-hitting dealing with things

like corruption,’’ and so on and so forth. But everybody’s waiting

now to see what is going to happen, and that’s why this phase

we’re going through is so important. We need to come from the G–

8 with something concrete coming out of that, because I always say

44

that in Africa, I think the cost barrier is higher than in other

places because we’ve just failed too many times, and a failure this

time would be, again, another tragedy, and just reinforce the feeling that there is no hope.

Senator MARTINEZ. I think it’s important that so many of the

participants, including a person I consider a friend, was part of the

Commission, and so many other Africans were participants, which

I think would enhance their credibility as being something that’s

generated by and for Africans, and so I think that’s an important

aspect of it, and I also believe that if we’re going to make progress

on this whole area of the solution as I think the Senator alluded,

is a solution that has to be African, and there has to be buy in into

the report, even before, or regardless of what may take place when

the G–8 come together, because that’s when we want to bring in

some, obviously tangible, needed benefits, but I think that there’s

going to have to be some recognition that if the answers are think

is so important, that there be the understanding of the report in

that fashion.

Senator, I wonder, as you mentioned in your remarks, that the

aid, the size of aid or the amounts of aid—at the end of the day—

may not be the most important, because of social issues and so

forth. How much aid do you think is appropriate in terms of increases, or the Millennium Challenge Account, are we doing our

part in your estimation, obviously there’s been some efforts on

AIDS and other things, how do you view where we are at this

point, and where we should be?

Senator KASSEBAUM BAKER. Well, Senator Martinez, I think we

have done some important things, the Millennium Challenge Account, and with HIV/AIDS, I think the HIV/AIDS particularly has

been an extremely productive combination of public/private partnership, as I mentioned.

What I said is that I don’t know that it’s the number and the

amount of money so much, as the delivery system. And I feel that

we have frequently not encouraged as much collaboration with others, and particularly the host country and those within it to make

sure that there is their buy in, as you say, to what’s being done.

Are we doing something from here that then may or may not be

something that is going to be sustained in country? And I think

that that’s an important part of the equation.

If you go back to the history of so many things, many of these

cycles we’ve been through before, infrastructure, and then it was

something else, and now it’s back to infrastructure, and, I think,

if we are going to see it work, it isn’t whether it’s going to be $25

billion or $2 billion, it’s going to be the commitment to sustaining.

We can’t say this is our goal, and a lofty goal, and walk away and

next year repeat the goal. I would much rather start with something much smaller and see it succeed, and build on it, than a lofty

goal which is just so many words, ultimately. And that’s why I feel

so passionately about taking a few things and showing how they

could succeed, with some restructured planning, rather than sort of

embrace something too large. Does that answer your——

Senator MARTINEZ. It does, and I think it’s an approach that I

would have to concur is probably appropriate, rather than get too

big on the idea and too little on the implementation. I think you’re

45

talking, I think you’re correct in terms of solid achievement that

can be measurable, there can be success to build on and continue

to build on in a steady fashion.

Ms. Birdsall, I’m intrigued with your testimony that had to do

with debt forgiveness and the cycle of debt, as the chairman alluded to, borrowing that ends up in the wrong places, followed by

debt that cannot be paid, and then apply to forgiveness of debt,

only to then begin the cycle of borrowing all over again. How can

we effectively break the cycle—I can buy into the notion that you

mentioned of a $500 income level forgiveness, which I presume

probably would be healthy anywhere in the world if that was the

situation, but then how do we go from there toward a grant system,

and preclude the further borrowing?

Ms. BIRDSALL. I think that’s exactly the right question, donor

system that new transfers to countries that have shown good management, and therefore have had their debt relieved, in other

words, the international community has made great progress in the

last 10 years in shaping the program called the HIPCI program,

the Heavily Indebted Poor Country Initiative, which forgives both

multilateral, past multilateral and bilateral debt, so how can that

progress be locked in to prevent, in the future, another round, and

there are really two ways. One is for the poorest countries who

clearly cannot, they need resources to get the ball rolling, to invest

in the prerequisites of growth, in education, in health, in creating

a healthy business environment and so on. And even if they can

pay back, until they get over $500 per capita, why not allow them

to use any additional resources they have to reinvest.

So that the first part is to lock in an agreement that going forward, resources go in grant form, which most bilateral donors are

doing already. It’s basically the regional development banks, the

World Bank and the IMF that are still sometimes making loans.

And this administration has actually taken a very strong position

on that, it’s been a long and contentious battle over IDA resources

going in grant funds with the Europeans, but essentially that battle has been resolved now, for all practical purposes, it just requires clarity on what the rule is, it’s a little bit muddy and confused now. The second part going forward is to ensure that new aid

is effective, that’s more important than anything else. I think there

wouldn’t be concern about whether it’s loans or grants, and that

these countries could use the aid effectively to get onto a growth

path. So there, we get right back into some of the other issues of

the role of the United States in supporting a coordinated, cooperative approach, the amounts that the United States itself provides,

and the uses of those resources within the countries.

Senator MARTINEZ. One of the things that I believe is so important in the path to development, obviously stable government and

rule of law, but it’s also the judiciary, and you mentioned the role

of the independent judiciary, a functioning judiciary. It seems to

me that that’s a precondition to investment, foreign investment,

which ultimately is the hope to take the place of aid, but it would

be the engine of development, really, until you can kick into that

next step of development, which is people wish to invest in your society. It seems to me important that some project be initiated in

terms of establishment of the rule of law, and establishment of, I

46

don’t mean just the rule of law, I mean a judicial system, rules of

commerce that would be transparent and understood, and the ability to enforce them in a judicial system, whether it be with assistance from international organizations or otherwise, is there any

specific recommendations in the report concerning this area?

Senator KASSEBAUM BAKER. We mentioned this as being important, I happen to know the American Bar Association has had various programs in several countries on the continent, Nigeria, particularly, on and off over the years——

Senator MARTINEZ. I’m specifically thinking of that, Senator, that

the projects that the American Bar has undertaken whether in the

Eastern European nations when they were first——

Senator KASSEBAUM BAKER. The CEELI program.

Senator MARTINEZ. Right.

Senator KASSEBAUM BAKER. And that’s been very effective in

Eastern Europe, and they’ve started a similar initiative in Africa.

I can’t speak to what it’s doing right now, can you?

Mr. THIAM. There is a similar program in West Africa called

OHADA. I think it’s a very interesting idea, which is to take, on

the regional level, where judges that are in the regional court are

less susceptible to local pressures and local considerations and corruption.

Senator MARTINEZ. It would seem to me to be a good idea, regional courts are regional.

Mr. THIAM. Exactly, and that’s working quite well, for arbitration

issues and so on, I think that could be duplicated in other regions,

so——

Ms. BIRDSALL. There is a tremendous amount of support for

these kinds of programs from the World Bank, and at least, I know

in the case of Latin America, from the Interamerican Development

Bank, and I would guess that the African Development Bank is

also heavily engaged, I think under the leadership of Paul

Wolfowitz at the World Bank, there could be strong signals from

the Congress, even, that maintaining and improving the investments there, in measuring the levels of governance by many different criteria—rule of law, free press, property rights, friendly

business environment, all of these ingredients that we itself is very

useful in clarifying what help is needed in what settings, and in

also clarifying which countries can absorb more resources more

quickly, going back to the point that you referred to, Senator

Kassebaum Baker.

Senator MARTINEZ. I realize my time is up, and I appreciate the

Chair’s indulgence, I see the hour of noon has arrived, so I appreciate the panel being here, and the wonderful report and the time

you’re taking with all of this.

The CHAIRMAN. Well, thank you very much, Senator Martinez. I

appreciate especially your leadership and that of Senator Feingold

in the subcommittee, because clearly much of the followthrough on

this will lie on your shoulders, but you’ll have some assistance from

all of us. Let me just mention briefly that Paul Wolfowitz has been

mentioned several times as the President of the World Bank. He

has called me and indicated his interest in Africa, and his interest

in taking a trip to Africa at an early point in his new responsibilities. He has, in fact, even run through a potential itinerary, asking

47

for my judgment about these various countries. I think that’s important, and so it may very well be that he will ask for the assistance of this committee and our staff in trying to think through

some of the issues that regard the World Bank and the loans and

their responsibilities, and maybe more strategically, the entirety of

the agenda we’ve been discussing this morning, so that’s a helpful

sign. Among other things I know he will look at, and we have not

had a chance to explore to date, is the question of oil. You take a

look at the continent, there are a lot of assets in Africa, collectively.

Extraordinary exploitation may occur. We have had other testimony of citizens of China and India and others working—some

would say—for the last acre that might have any drilling, potentially. As they think of their needs, and how all that fits together,

it would be an interesting question to explore how Africans will use

their own resources. This is not, necessarily, a deficit region in

terms of opportunities. That will have to wait for another hearing

but it may be a part of the consideration at the G–8 or in other

circumstances.

I just want to observe, finally, that the President asked for some $33 billion total in the so-called ‘‘150 Account.’’ That’s the account

that deals with foreign assistance, generally. This committee authorized that request, all $33 billion, but by the time we finished

the budget process on the floor, we were down to $2.3 billion less

than this. The appropriators are now working with that recommendation in coming up with the so-called 302(b) allocations.

Now, it’s our hope, I think, in this committee, having voted for the $33 billion, that the full amount can be considered by the appropriators. The outcome, to say the least, is uncertain. We have

the seriousness of the problem ahead of us to date, and we also

know that in the real world of congressional situations, with two

houses, and many committees, that sometimes our own enthusiasm

and idealism is not necessarily reciprocated by others. Yet we offer

the witnesses the assurance of our own concern, as well as that of

those who are listening to this conference today.

We thank you all for your generous allocation of time, both to the

Commission report, as well as to the analysis of what has occurred.

We thank all Senators, and the hearing is adjourned.

[Whereupon, at 12 p.m., the committee was adjourned.]

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